The California Supreme Court just radically altered the test for who is or is not an independent contractor (Dynamex Operations West, Inc. v. Superior Court.) Whether a worker is an independent contractor or an employee is the critical question to determine the application of Federal and State wage and hour laws, the jurisdiction of the Division of Labor Standards Enforcement, Employment Development Department, Franchise Tax Board, IRS, Workers Compensation. Appeals Board and a host of other State and Federal laws.
California’s Industrial Welfare Commission (“IWC”).
“ABC test” used in some other jurisdictions.
California had a number of different definitions for determining whether an individual is an employee depending on the applicable statute or regulation. There were anywhere from between 6 and 18 factors to consider, no one of them conclusive in itself, considered in balance with all the other factors. Now there is only one—”suffer or permit to work.” To determine whether an employer has “suffered or permitted” an individual to work the employer must establish three factors known as the “ABC test.” If the employer fails to establish any one factor the worker is NOT an independent contractor. The factors are:
(A) that the worker is free from the control and direction of the hiring entity in connection with
the performance of the work, both under the contract for the performance of the work and in
(B) that the worker performs work that is outside the usual course of the hiring entity’s
(C) that the worker is customarily engaged in an independently established trade, occupation, or business of the same nature as the work performed.
The court’s opinion offers some guidance as to how to apply the three-part test.
(A) How to satisfy this part of the test depends on the nature of the business. Again, quoting from the opinion—”For delivery service, those aspects include obtaining customer/customer service, prices charged for delivery, routes, delivery schedules, and billing. Plaintiffs contend that these factors are all controlled by Dynamex because it obtains the customers, maintains a centralized call system, maintains a package tracking system, sets the prices for its services and customers are billed by Dynamex. . . . There is also evidence that customer service is handled by some of the drivers, depending on the customer’s relationship with that driver. Finally, the defendant does not necessarily control the drivers’ delivery schedules, as a number of drivers state that their only obligation is to complete the deliveries by the end of the business day.”
(B). “[W]hen a retail store hires an outside plumber to repair a leak in a bathroom on its premises or hires an outside electrician to install a new electrical line, the services of the plumber or electrician are not part of the store’s usual course of business and the store would not reasonably be seen as . . . an employee. On the other hand, when a clothing manufacturing company hires work-at-home seamstresses to make dresses from cloth and patterns supplied by the company that will thereafter be sold by the company . . . or when a bakery hires cake decorators to work on a regular basis on its custom-designed cakes . . . , the workers are part of the hiring entity’s usual business operation and the hiring business can reasonably be viewed . . . as employees.”
(C) Does the worker perform the same services for other employers or did the worker have employees of his or her own? Did the worker independently choose the burdens and benefits of self-employment? Generally, such an individual “takes the usual steps to establish and promote his or her independent business — for example, through incorporation, licensure, advertisements, routine offerings to provide the services of the independent business to the public or to a number of potential customers, and the like.”
Employers in California that have independent contractors should immediately review their relationship using the “ABC test” to determine whether such workers should be reclassified. The penalties for violating Section 226.8 include fines between $5,000 and $15,000 per violation of the law, in addition to any other fines allowed by law. If the employer is engaged in a pattern or practice of violating this law, the fines are increased to between $10,000 and $25,000 per violation.
© The Law Office of Phillip J. Griego 2020
You work hard for your paycheck, and every dollar counts. So you might be surprised to learn that getting underpaid is quite common, and not every employee realizes it’s happening. Employee rights lawyers recommend verifying the accuracy of every paycheck you receive before you deposit it. If you do think you’re being underpaid, talk to an employment law attorney in San Jose, CA right away.
Look for common pay stub errors.
Many different payroll errors can result in you receiving a smaller paycheck than you should. As you examine your pay stub each week, ask yourself the following questions.
- Are my hours correct?
- Is the rate of pay correct?
- Did I get paid time-and-a-half for overtime?
- Did my employer take out unusual deductions?
Report the mistake to human resources.
It’s possible that a too-small paycheck is simply due to a clerical error. Visit your company’s human resources department to discuss the issue. You have the right to request a timely payment of the money you’re owed. In most cases, your employer should include compensation in your next paycheck.
Maintain your own work records.
Whether or not you’ve previously detected paycheck errors, it’s good practice to retain your pay stubs and keep your own records. Keep a small notebook in your car or desk, and write down the times you arrive at work and leave each day. Add up the hours and make a note of whether you’re owed overtime pay.
Talk to a labor attorney.
Contact an employment lawyer, and schedule an initial consultation. Bring your recent pay stubs and any other relevant documents, such as your employment contract if you have one. Your lawyer will review these documents, explain the applicable labor laws, and discuss your options. In some cases, employers are more willing to pay what they owe their employees when they learn that a lawyer has been retained—even before an official complaint is filed. If you’re still denied the pay you’re entitled to, your employment attorney can file a lawsuit.
Talk to your co-workers.
Your lawyer may recommend that you speak privately with your co-workers to find out if they’re also being underpaid. You and your co-workers may pursue a collective action against the employer. In litigation, there can be strength in numbers.
Employers in California must be mindful of both federal and state laws. This can get complicated because these laws can evolve frequently, especially when they pertain to marijuana. Although Californians can legally possess and use marijuana for medical and recreational purposes, federal law still classifies it as a Schedule I drug that has no medicinal use. This means that it’s possible for employers to face legal difficulties if they knowingly continue to employ workers who use marijuana. To keep your company out of legal entanglements, seek employment law advice from a labor attorney in San Jose, CA who is familiar with these matters.
Drug-Free Workplace Policies
Not all companies may be affected by the marijuana use of employees, as long as the substance is not taken to or used on the company’s campus. However, if your company is subject to the 1970 Federal Controlled Substances Act, it must have a Drug-Free Workplace Program in effect. Companies are subject to this law if they are nonprofits that receive federal grants (of any amount), or if they are for-profit entities that receive $100,000 or more in federal contracts. An employment lawyer can draft a drug-free workplace policy to include in your employee handbook.
Marijuana-Related Work Issues
Beyond the legal requirements, there are other issues for employers to consider. Employees who work while under the influence are more likely to be involved in workplace accidents. Their productivity may suffer, and the mere fact that some people are working under the influence of marijuana may affect the morale of the entire workplace.
Medical Marijuana Considerations
Labor attorneys are often asked if employers must make exceptions for workers who have a valid medical marijuana card. Remember that marijuana is still illegal under federal law. Even under state law, California courts have made it clear that it’s within an employer’s rights to terminate or refuse to hire an individual who tests positive for marijuana, with or without a medical marijuana card.
An intriguing question regarding unlawful termination has been making headlines lately: Are NFL team owners legally able to fire players who use time on the field to protest social injustices? Despite the urgings of the 45 th President, whether or not an NFL owner can let a player go because of protests is a bit more complicated than simply saying, “You’re fired.” Employment lawyers serving San Jose, CA would defer to the player’s contract and the collective bargaining agreement when determining whether a termination is unlawful or not.
In the typical workplace, an at-will employee can be fired at any time for any reason, as long as the termination does not arise from discrimination based on a protected class. Employees who work under a contract, such as NFL athletes, can only be fired under the terms specified in the contract. The typical NFL contract requires athletes to conduct themselves in a manner that befits the “public respect.” It’s possible for an NFL owner to fire an athlete if he or she claims that the athlete’s protests have diminished the public respect. However, since fans are about evenly split between disliking the protests and appreciating the true meaning behind them, the athlete could possibly argue that protesting in such a way actually upholds the public respect.
Legal protections in the workplace have come a long way from previous decades, but some employers still run afoul of employee protection laws, including those regarding pregnancy. Civil rights attorneys in San Jose, CA can offer employment law advice to employees who think they may have been discriminated against based on a protected class, such as pregnancy.
Asking About Pregnancies and Intended Pregnancies
It is not within an employer’s rights to ask about an employee’s intentions to become pregnant, or about whether she is currently pregnant. Employees have every right to consult a labor rights lawyer if they are asked this question. Likewise, employers may not ask job candidates about their intentions toward parenthood, nor can they base a hiring decision on whether a job candidate intends to become pregnant or is pregnant.
Disclosing a Pregnancy Status
Women often choose to give their employers a heads up when they are expecting to use maternity leave soon. However, not every new mother will take multiple weeks off. Women are within their rights to work up to their due date, and then take vacation time for the delivery and recovery period. Women who aren’t yet expecting, but intend to become pregnant, can use time off for doctor’s appointments and infertility treatments in accordance with the company’s policy.
Women who plan to take maternity leave given by the company—or time off requested under the Family and Medical Leave Act (FMLA)—must give reasonable notice of the leave. Not every employee is eligible for FMLA. Those who do are lawfully allowed to take up to 12 weeks of leave within a 12-month period for family or medical reasons, such as the birth of a child. FMLA leave is unpaid. At the end of the leave, employers are legally required to restore the employee’s previous position, or an equivalent position that offers the same benefits and wages.
Requesting Reasonable Accommodations
It’s possible for a pregnant woman to be unable to carry out certain job duties due to the conditions of pregnancy. During the last few weeks, for example, she may not be cleared by a doctor to take a business trip. There may also be restrictions on heavy lifting. Although employers cannot ask about pregnancies or intended pregnancies, they should be given reasonable notice about any accommodations the employee needs.
In California, employers are not legally required to provide paid or unpaid vacation time to their employees. If an employer does have an established vacation time policy, then employment law can regulate it. If you think your employer may have violated your rights with regard to your vacation benefits, consider talking to a labor rights lawyer serving San Jose, CA. An employment law attorney can determine whether your accrual or denial of vacation time violates any state regulations.
The Accrual of Vacation Time
California law recognizes that vacation time is accrued as labor is performed. The longer an employee works for the company, the more vacation time he or she accrues. Hypothetically, if Sara is given two weeks of vacation each year, then she’ll only have half of that available to her by the six-month point.
The Disposal of Unused Vacation Time
An employee rights lawyer can advise you that your vacation benefits are considered to be earnings under state law. This means that, barring a contradictory clause in a collective bargaining agreement, your employer cannot legally deny you those benefits if any are unused when you resign or are terminated. Your employer must compensate you for these unused vacation hours, corresponding with your final rate of pay.
The Legality of a Waiting Period
It’s legal—and common practice—for employers to require a probationary period for new employees, during which they do not accrue vacation time. As long as the vacation plan cannot be considered subterfuge , it’s acceptable for an employer to impose this waiting period. For example, an employee may not accrue vacation time at all the first year, followed by four weeks the second year, followed by two weeks during the third year. An employment law attorney could argue this is subterfuge, since it’s implied that two of the four weeks during the second year actually accrued during the first year. A legally acceptable vacation plan might offer zero vacation time during the first year, followed by two weeks for years two through five, and three weeks for each year following that.
The California Equal Pay Act exists to ensure that employees are paid the same amount of equal work, regardless of their sex. In 2015, the California Fair Pay Act was introduced to clarify and strengthen provisions set out by the Equal Pay Act. If you have questions about the law, either as an employer or employee, contact an attorney for employment law advice in San Jose . Here are the answers to some common questions businesses and their workers have about how the law applies to them.
What does the California Equal Pay Act say about wages?
According to the law, employers must pay employees equal wages when they do work that is “ substantially similar .” This refers to work that is done in similar working conditions and that requires a similar amount of skill and effort with a similar amount of responsibility. Pay must be equal, regardless of the employee’s sex. In order to provide unequal pay, employers must be able to establish a legitimate reason and demonstrate that these reasons are applied to all employees equally.
What is different under the new law?
In addition to the existing provisions, the new law states that employees must be paid equally for substantially similar work, even if the work is done at two different locations of the business. When employers point to specific factors to account for pay differences, the factors must be judged to be legitimate and they must be sufficient to account for the entire pay difference. The law also specifically makes it illegal for employers to retaliate against employees who seek to enforce the law with the help of a labor rights lawyer and to prohibit employees from discussing their pay. Under the new guidelines, employers must keep records of wages and employment for three years.
What should an employee do if he or she is not being compensated fairly?
If you are an employee who believes that you are not being paid fairly under the Equal Pay Act, make an appointment to discuss your case with a labor rights attorney. Your attorney can help you file a case with the Labor Commissioner’s Office or in court, depending on what is appropriate for your circumstances.
The laws surrounding employee benefits can be complex, and they differ from state to state. For this reason, it is helpful to work with an employment attorney in San Jose if you are employed in that city to find out how the law applies to you. Watch this video to find out more about what employment law says about benefits.
In some cases, employers are required to provide benefits, such as unpaid time off for an illness and the option to continue receiving insurance after leaving employment. Employers may provide other benefits at their own discretion, but they must do so without discrimination among their employees. If you suspect that your rights are being violated, consult with an employee rights lawyer to determine the best steps to take.
Whistle blowers are protected from retaliation by law. If you are involved in a whistle blowing case, hire an employee rights attorney in San Jose to ensure that you are not subject to any unlawful retaliation in your workplace, and so that you have the legal support you need if your employer does target you.
Whistle blowers’ protections are extensive. Your employer cannot deny you benefits, demote you, lower your pay or hours, or discipline you in reaction to your whistle blowing. You may not be reassigned in such a way that will impact your future potential for promotions, and you cannot be terminated from your position as the result of being a whistle blower. Your employer also cannot attempt to intimidate or threaten you or blacklist you in your industry if you seek employment elsewhere. Both federal and state laws protect whistle blowers from this kind of retaliation at work. If you feel that your rights are being violated, document the instances of retaliation and contact an employment lawyer for help. Your attorney can help you decide what to do next to ensure that your rights are protected.
Both federal and state laws make mandates about how employers must handle wages and hours for their employees. Violations of these employment laws are often the subject of employee-rights cases. If you believe your employer is not honoring your wage or hour rights, contact a labor rights lawyer in San Jose to determine if you have cause to pursue legal action. Here is a closer look at some wage and hour employment laws and how they are enforced.
What are my rights to fair wages and hours?
On the federal level, wages and hours are governed by the Fair Labor Standards Act or FLSA. The FSLA mandates a standard minimum wage, overtime pay requirements, child labor standards, and employers’ responsibilities for record-keeping. These standards apply to all employees across the country for both full and part-time work. After non-exempt employees—those who typically do not make a salary—reach 40 hours per week of work, they must receive overtime pay of at least one-and-a-half times their normal pay. The FSLA does not address paid time off for any reason, premium pays for weekend or holiday shifts, raises, or severance pay.
Additionally, states may have their own wage and hour laws. These laws can set a different minimum wage, and they may make further provisions for hours and wages. In California, for instance, state law sets standards for when employees are entitled to breaks. Laws may also exist on the local level. Employers must honor the law that gives their employees the generous breaks and highest wages.
How are these laws enforced?
The responsibility to enforce these laws depends on which laws are in question. For federal violations, the Wage and Hour Division of the U.S. Department of Labor enforces the laws. At a state or local level, the government office responsible for the law will enforce it. Filing complaints and going through the investigation process can be confusing for employees, so it is always recommended to have a labor rights attorney file disputes on your behalf. Your lawyer can ensure that your claims are filed correctly and that your rights are preserved at every stage of the process.
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