CA Contract Workers Face Uncertain Future With High Court Ruling

Thousands of workers who provide services to business across California on a "gig job" basis may soon be affected by a recent decision made in the state's high court. A California Supreme Court ruling from just last week calls into question the current standards for classifying someone as an "independent contractor" versus "employee."

People who work in the independent capacity currently have a great deal of just that: independence when it comes to hours and selection of jobs. Uber and Lyft drivers are a prime example of those in this type of service.

However, these same people also are exempt from certain privileges like benefits and a consistent, full-time schedule.

The decision from Dynamex Operations West, Inc. v. Superior Court means that companies like Uber, Lyft and construction contractors could potentially have to pay all their workers minimum wage and overtime, a California employment law attorney tells Patch.

"This decision is expected to result in thousands of California workers currently classified as independent contractors to be re-classified as employees, and therein be eligible to receive the added protections of California’s wage orders – such as the payment of minimum and overtime wages, mandatory meal periods and paid rest breaks, and other rights pertaining to wages, hours and working conditions," Brian Mankin said.

The New York times reports this could upend many companies' business models, as it's estimated that the difference in employment classification can mean 20 to 30 percent more in costs.

"The court essentially scrapped the existing test for determining employee status, which was used to assess the degree of control over the worker," the NYT reported. "That test hinged on roughly 10 factors, like the amount of supervision and whether the worker could be fired without cause."

Mankin says the state has opted for something more simple called the "ABC" test — which is currently used in some other states — to determine if workers should technically be classified, and paid as, employees. That test has only three factors.

"Both companies and independent contractors will likely be reviewing existing contractor classifications to determine if it complies with the ruling," he said.

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