In these precarious economic times, California workers are slaving away, working extremely hard to make ends meet. They can use every nickel and dime they can get. Instead, many workers are getting "nickeled and dimed” by employers who, deliberately or otherwise, misclassify their workers. The benefits of misclassifying their employees include not having to pay payroll taxes, not having to provide meal periods and rest breaks, and, otherwise, not having to incur the sundry expenses associated with keeping an employee. The one who loses out, of course, is you, the worker, who would otherwise benefit from California’s wage and hour laws. Here’s a test to determine whether you fall in the column of “employee” rather than “independent contractor” and, therefore, to ascertain whether you’ve been deprived overtime pay and other benefits required of employers under California law.
Imagine this: You’ve been hired by a company or organization. You think you’ve landed the dream job, or, at minimum, something steady that will help pay your bills and sustain you for the foreseeable future. You work very hard your first two weeks and you are given your first paycheck. You don’t see any paystub, wage statement or other indication that payroll taxes have been paid or any amount withheld for Social Security or Medicare. You don’t think much of it. In fact, you like that those things are not being deducted. You enjoy your job and you “suck it up.” You start putting in late hours and you notice your pay doesn’t increase as the overtime goes up. As time goes on, that you are working during what should be your lunch break. You are not given (or are seldom given) rest breaks. Tax season rolls around and you are stuck with a giant self-employment tax bill. You are shocked: you are not “self-employed;” you’re working for your boss. You see an attorney. The calculations are made and it’s determined that you are owed thousands, perhaps tens of thousands in back overtime pay. What do you do?
No one, set definition exists for the designation “overtime worker.” So it’s necessary to look at how courts and enforcement agencies look at a particular scenario to see if a worker is either an employee or independent contractor.
Where handling a matter where employment status is at issue, the Division of Labor Standards Enforcement (or DSLE) presumes that you are an employee. The presumption, however, is “rebuttable;” that means your employer can present evidence to the contrary, therefore defeating that presumption. The actual determination of whether you are an independent contractor or an employee depends upon a number of variables, all of which must be taken into account. No one factor controls this determination. As a consequence, it’s necessary to thoroughly examine the facts of each worker-boss relationship. Then, the law is applied to those facts.
The DLSE uses a “multi-factor” or “economic realities” test (adopted by the California Supreme Court in S. G. Borello & Sons, Inc. v Dept. of Industrial Relations (1989) 48 Cal.3d 341). In applying this test, the most substantial factor to be considered is whether your employer, that is, the person or entity to whom the service is rendered, has control (or the right to control) you as regards (a) the work done and (b) how the work is to be performed (“manner and means”). There are additional factors that may be taken into account, depending on the issue involved. These are:
1. Whether you, the person performing the services, is engaged in a business or occupation that is different or distinct from that of your boss;
2. Whether or not the work is a part of your boss’s regular business;
3. Whether it’s you or your boss who supply the tools, instrumentalities and work place for you to perform the job duties or tasks;
4. Your investment, if any, in the materials or equipment needed to complete these tasks;
5. Whether the service rendered necessitates a special skill;
6. The type of occupation: in other words, whether the kind of job duties you are fulfilling require the supervision by your boss. Said another way, whether the type of work you do is usually performed under the direction of the employer or can be done by a specialist without direction or supervision.
7. Your opportunity for profit or loss depending on your boss’s managerial skill;
8. The length of time that is takes to carry out the services;
9. Whether the working relationship is permanent or temporary;
10. Whether you are paid by the clock or by the job;
11. Though not determinative, whether or not you and your boss believed you were creating an employer-employee relationship at the outset.
It’s important to note that, even where your boss does not control or supervise your work details, an employer-employee relationship can still be found if (a) your boss retains constant control over the operations (as a whole), (b) whether your job duties are an integral part of said operation; and (c) whether the nature of the work you are performing makes detailed supervision and control necessary.
If you believe this test would determine that you are an employee, as opposed to the independent contractor status to which you’ve been relegated, and you’ve put in overtime for which you believe you have not been paid, the Coimbra Law Office is available at 1-855-IH8-BOSS (855-448-2677).
Nothing in the aforementioned should be interpreted to be legal advice or should be construed that way. Every case is different and requires individual evaluation.
Lorgio Coimbra is a no-holds barred employment law attorney. The Coimbra Law Office vociferously advocates for workers who have been denied overtime pay, meal breaks and rest periods, have not been compensated for business-related expenses, and have suffered other grievances and damages by their employers.
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