What is the difference between an independent contractor and an employee in California, and how do I determine the classification for my workers?

In California, the classification of a worker as an independent contractor or an employee is determined by several factors, including the degree of control the employer has over the worker, the type of work being performed, and the worker's role in the employer's business.

The California Labor Code presumes that all workers are employees unless the employer can establish that the worker is an independent contractor. This presumption is often difficult to overcome, and the employer has the burden of proving that the worker is properly classified as an independent contractor.

To determine whether a worker is an independent contractor, California follows the "ABC" test, which was established by the California Supreme Court in Dynamex Operations West, Inc. v. Superior Court. Under the ABC test, a worker is presumed to be an employee unless the employer can establish that all three of the following conditions are met:

• A) The worker is free from the control and direction of the hiring entity in connection with the performance of the work, both under the contract for the performance of the work and in fact;
• B) The worker performs work that is outside the usual course of the hiring entity's business; and
• C) The worker is customarily engaged in an independently established trade, occupation, or business of the same nature as the work performed for the hiring entity.

If the employer cannot meet all three prongs of the ABC test, the worker must be classified as an employee under California law.

If you are unsure whether your workers are properly classified as independent contractors or employees, you may want to consult with an experienced employment attorney. An attorney can help you review your hiring practices and employment contracts, and can advise you on the potential legal risks associated with misclassifying workers.

To avoid potential legal liability, you may also want to consider using a written agreement that clearly defines the nature of the relationship between your company and its workers, and that includes specific provisions addressing issues such as the worker's status as an independent contractor, compensation, termination, and confidentiality.

Finally, keep in mind that the determination of whether a worker is an independent contractor or an employee may have tax implications for both the employer and the worker, and you should consult with a qualified tax professional to ensure compliance with all applicable tax laws and regulations.