Supreme Court Ruling Has Independent Contractors Looking For Answers
SACRAMENTO (CBS13) — A California Supreme Court ruling has independent contractors looking for answers for their future.
Many worry the ruling in Dynamex Operations West v Superior Court of Los Angeles will debilitate millions of workers, while others say it's a decision that was long overdue.
The court changed the way independent contractors are classified in the state, amending a previous court decision. California labor code has no official definition of an independent contractor.
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Dozens of industries will be affected as businesses and workers will be forced to change the way they've done business for decades.
"I was surprised," said truck driver Balraj Singh.
Singh has been a truck driver for eight years, working as an independent contractor like many truckers do. Thursday, he learned his income could take a hit as his employment status may soon change.
"Less hours, less money."
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In April, a landmark decision was handed down by the California Supreme Court that requires independent contractors to become employees if the service they offer is within the usual course of their employer's business.
The April 2018 court ruling now says workers are assumed to be employees unless all three of these factors can be proven:
(A) that the worker is free from the control and direction of the hirer in connection with the performance of the work, both under the contract for the performance of such work and in fact;
(B) that the worker performs work that is outside the usual course of the hiring entity's business; and
(C) that 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.
"Nearly two million people are independent contractors here in the state of California," said Becky Warren, who helped form the I'm Independent Coalition after the court ruling.
She says the impacts are huge, affecting rideshare and delivery drivers, construction and cosmetology workers, even doctors and therapists.
"Recent polls show that over 80 percent of independent contractors want to be independent contractors. They want that choice to have that flexibility some make more money being an independent contractor."
The high court's case involved national delivery service Dynamex Operations West, which was accused of turning employees into independent contractors to save money on things such as state disability and workman's compensation coverage, as well as payroll taxes.
"It's cheaper and they're cheap and they want to make a greater profit on the back of somebody else," said David Mastagni.
Mastagni, who's been an employment attorney for 45 years, says the ruling is more than fair.
"Now after this case, there's a glimmer of hope and responsible employers will embrace it," he said.
But, independent contractors who don't want to give up their freedom are now fighting for legislation to put the ruling on hold, until a better solution is figured out.
"I really don't like it. I don't know how it's going to be, don't know how it's going to affect us," said Singh.
There are more questions than answers at this point. The Department of Consumer Affairs says it's aware of the ruling, but is still waiting on information from other agencies to be able to provide answers to its clients.
There will be a free seminar for all independent contractors about the ruling at Bottle and Barlow barbershop in at 1120 R Street in Downtown Sacramento at 5 p.m. on Sunday.
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