Worker Classification to be Tested in California Supreme Court

In January, 2015, the California Supreme Court granted review of Dynamex Operations West, Inc. v. Superior Court (Lee) (2014) 230 Cal.App.4th 718.

The issue presented is as follows:

In a wage and hour class action involving claims that the plaintiffs were misclassified as independent contractors, may a class be certified based on the Industrial Welfare Commission definition of employee as construed in Martinez v. Combs (2010) 49 Cal.4th 35, or should the common law test for distinguishing between employees and independent contractors discussed in S.G. Borello & Sons, Inc. v. Department of Industrial Relations (1989) 48 Cal.3d 341 control? (source)

If the Court expands the test for worker classification to the employment-oriented and more simple, three pronged definition of "employer" found in the IWC Wage Orders as it currently applies in minimum wages actions, the ramifications to California taxpayers will be significant. (See Cal. Code Regs., tit. 8, ยง 11090, subd. 2 (D): "'Employ' means to engage, suffer, or permit to work.") If the California Supreme Court decides that the Wage Order definition controls, California courts would potentially no longer rely on the common law, multi-factor test, as defined in Borello, but would rather simply turn to the more employment-oriented "engage, suffer, or permit to work" definition. In other words, nearly every worker could potentially be classified as an employee.

Contact our attorneys today to review your contract worker hiring policies.

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