Employee Misclassification Attorney in Sherman Oaks, California
The U.S. Department of Labor and the enforcement arm of the Fair Labor Standards Act long sought to ensure that employers do not abuse the independent contractor status when hiring employees.
The difference between having an employee and an independent contractor on staff can be immense for both the company and the person misclassified as a contractor. The employer gets to skirt employment laws and is not obligated to withhold and pay taxes. A misclassified worker is deprived of benefits and vastly under-compensated, and they will have to pay taxes as a result.
California has led the nation in restraining the habit of employers in misclassifying workers with the passage of AB 5, which established what is called the “ABC Test” for determining who is an employee and who is an independent contractor.
Workers suffer from businesses that either willfully or naively disregard the law. If you have been misclassified in Sherman Oaks, Northridge, Van Nuys, or anywhere in the San Fernando Valley, California, contact us at The Sweeney Law Firm, APC.
Our firm is ready to advise you of your options and help you seek a solution and pursue any compensation or benefits that were denied due to misclassification.
Employee vs. Independent Contractor: The ABC Test
AB 5, which became law on January 1, 2020, codified a decision by the California Supreme Court in a case known as Dynamex Operations West, Inc. v. Superior Court of Los Angeles.
The ABC Test, devised by the court and incorporated into AB 5, determines if a worker in California is an employee or independent contractor ruled by the Labor Code, Unemployment Insurance Code, and the Industrial Welfare Commission wage orders.
Under the test, to be considered an independent contractor, a person must:
Be free from the control and direction of the hiring entity
Perform work that is outside the usual course of the hiring entity’s business
Be customarily engaged in an independently established trade, occupation, or business of similar nature involved in the work performed
If, for example, a business has a pipe burst on its premises and calls in a self-employed plumber, that person is likely an independent contractor. The plumber sets his compensation, the time of doing the work, and brings his own tools of the trade. If a business hires someone to repair plumbing full-time at the employer's discretion, sets the worker’s hours, and provides the tools necessary, then the individual is an employee.
Exemptions Under AB 5 & Proposition 22
AB 5 also contains exemptions for certain professions, including physicians, surgeons, lawyers, architects, engineers, licensed accountants, commercial fishermen, and veterinarians. Other professions that are exempted stated that the professions maintain a bona fide business location. These professions include marketing, human resources outsourcing, travel agency work, graphic design, art services, photography, and freelance writing.
Ride-sharing giants Uber and Lyft sponsored a state initiative in 2020 known as Proposition 22. These companies argued in the campaign that their companies rely on independent drivers who personally set their work hours as employees and use personal vehicles as resources of their trade.
Voters passed Prop 22, and workers at Uber and Lyft are thus considered independent contractors. The proposition, however, also provided for increased compensation and some benefits, including health care subsidies.
Recovering Back Pay & Lost Benefits Under AB 5
AB 5 gives the California Attorney General the power to bring lawsuits against companies that misclassify workers. Because AB5 became part of the California Labor Code, violations fall under the Labor Code Private Attorneys General Act. This law allows aggrieved workers — current or former — to file lawsuits for lost pay and benefits.
The California Labor Code also provides for civil penalties ranging from $5,000 to $25,000 for each willful violation of AB 5 and its standards of employee classification.
Employee Misclassification Attorney
Serving Sherman Oaks, California
If you feel you’ve been unjustly classified as an independent contractor, contact us at The Sweeney Law Firm, APC. Our focus has always been on helping workers exercise workplace and employment rights and holding those who abuse the rights accountable. At The Sweeney Law Firm, APC, we proudly serve clients in Sherman Oaks, Northridge, Van Nuys, or anywhere in the San Fernando Valley, California.