Employee or Independent Contractor: Who is Best Suited to Provide a Meaningful Diagnosis Regarding Your Workers?

Doctor and patient. Measurement of blood pressure in a hospital

We previously wrote about the federal Department of Labor’s perspective on classifying employees and independent contractors here. However, many California employers are subject to the snare of multiple frameworks, all at the same time, and must also know how California law views such classifications.

For example, the California Employment Development Department (EDD) has its own distinct self-diagnosis worksheet for business owners to determine whether a worker is most likely an employee or an independent contractor. The EDD’s worksheet consists of a series of “yes” or “no” questions, such as:

  • Do you instruct or supervise the person while he or she is working?
  • Can the worker quit or be discharged (fired) at any time?
  • Is the work being performed part of your regular business?
  • Is the worker free to make business decisions which affect his or her ability to profit from the work?
  • Is the worker paid a fixed salary, an hourly wage, or based on a piece rate basis?

The underlying test the EDD applies through these and other questions is the “control test.” In other words, if the principal has the right to direct and control the manner and means by which the work is performed, the worker will be an employee even if the principal never actually exercises the control. If the principal does not have such rights, the worker will generally be an independent contractor. With that framework in mind, the number of “yes” and “no” answers is meant to steer a business owner toward either the “employee” or “independent contractor” category.

However, a self-diagnosis is as reliable as the diagnostician. Are you comfortable relying on your self-diagnosis during an EDD audit? If not, you should consult with an experienced employment attorney.

 

This blog is presented under protest by the law firm of Ervin Cohen & Jessup LLP. It is essentially the random thoughts and opinions of someone who lives in the trenches of the war that often is employment law–he/she may well be a little shell-shocked. So if you are thinking “woohoo, I just landed some free legal advice that will fix all my problems!”, think again. This is commentary, people, a sketchy overview of some current legal issue with a dose of humor, but commentary nonetheless; as if Dennis Miller were a lawyer…and still mildly amusing. No legal advice here; you would have to pay real US currency for that (unless you are my mom, and even then there are limits). But feel free to contact us with your questions and comments—who knows, we might even answer you. And if you want to spread this stuff around, feel free to do so, but please keep it in its present form (‘cause you can’t mess with this kind of poetry). Big news: Copyright 2015. All rights reserved; yep, all of them.

If you have any questions about this article, contact the writer directly, assuming he or she was brave enough to attach their name to it. If you have any questions regarding this blog or your life in general, contact Kelly O. Scott, Esq., commander in chief of this blog and Head Honcho (official legal title) of ECJ’s Employment Law Department, at (310) 281-6348.