Court ruling could affect whether workers are employees or contractors

Court ruling could affect whether workers are employees or contractors

The court applied what's known as the "ABC test" to determine who qualifies as an independent contractor. If the worker is classified as an independent contract, the contractor pays the full amount.

While the Court's decision will likely have its biggest impact on the state's growing "gig economy" - a topic we have recently addressed more broadly - it will also extend to almost every company that engages independent contractors in California. The upshot is that Monday's decision makes it harder for companies to classify employees as independent contractors, reports the Los Angeles Times. While the drivers were generally free to set their own work schedules, they had to notify the company of the days they meant to work in advance. Additionally, drivers used their own vehicles, but wore company badges and shirts (purchased with their own funds), and sometimes were required to attach company or customer decals to their vehicles when making deliveries.

"Although in some circumstances classification as an independent contractor may be advantageous to workers as well as to businesses, the risk that workers who should be treated as employees may be improperly misclassified as independent contractors is significant in light of the potentially substantial economic incentives that a business may have in mischaracterizing some workers as independent contractors", the justices wrote. To be an independent contractor, a worker must be free from the company's control and direction in the way they perform a task.

Chelsea Property Group Inc Sentiment Increases on Better Stock Potential
Since December 18, 2017, it had 0 insider purchases, and 1 sale for $1.23 million activity. (NYSE:HON) on Wednesday, February 14. It is negative, as 75 investors sold KMI shares while 372 reduced holdings. 97 funds opened positions while 191 raised stakes.

The court said in setting this more stringent set of standards that "wage and hour statutes and wage orders were adopted in recognition of the fact that individual workers generally possess less bargaining power than a hiring business and that workers' fundamental need to earn income for their families' survival may lead them to accept work for substandard wages or working conditions".

The court provided examples: If a store hires a plumber to fix a leak, the plumber is an independent contractor.

That independent trade also must encompass the same type of work performed for the business.

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