California Supreme Court Decision – Contractors vs Employees

What floats your boat? Having taxes taken out of your paycheck which also gives you the cushion of employment insurance as an employee? Or being part of gig culture and its relative freedoms sans health insurance?

Or, would you rather have a choice?

Last April, the California Supreme Court decided that workers whose responsibilities are directly related to a company’s business or who work with direct oversight are classified as employees, not independent contractors.

This ruling was, in part, brought about from a lawsuit filed by drivers (employees) for a package delivery system who were reclassified as contractors and forced to use their own vehicles and pay for gas if they wanted to remain with the company. The ruling was a measure to protect workers from employers seeking to avoid responsibilities in efforts to cut labor costs.

However, the practice of moving to contractors is a nationwide trend and the gig economy, fueled in part by apps, is a multibillion dollar industry (think Grubhub, Uber, Lyft, and Amazon). More interestingly, Uber claims that it is not in fact in the transportation business, rather, simply technology that connects people with drivers.

However, among the freedoms of independent contracting comes the ability to say no. In some industries, such as exotic dancing, this is important as some dancers do not want to be told by an employer that they must perform for a particular client with whom they are uncomfortable. And many small businesses do not want the burden and expense of hiring employees when they were previously independent contractors.


For more information, visit the LA Times.

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