Important Changes to Independent Contractor Classifications (Dynamex Decision)

In Dynamex Operations West Inc. v. Superior Court (“Dynamex”), the Supreme Court of California replaced the decades-old Borello multifactor control test for determining whether a worker is an employee or independent contractor under California wage orders, with the “ABC test” currently applied by other states including New Jersey and Massachusetts.  The new test presumes the worker is an employee unless the hiring entity can prove all of the following:

  • that the worker is free from the employer’s control and direction in connection with the performance of the work, both under the contract for the performance of such work and in fact;
  • that the worker performs work that is outside the usual course of the hiring entity’s business; and
  • that the worker is customarily engaged in an independently established trade, occupation, or business.

The new standard announced in the Dynamex decision is limited to claims alleging violations of California’s wage orders. The Court left open the question whether the same test would apply to claims under the Fair Employment and Housing Act (FEHA) or California Labor Code, or whether a different test (such as the multi-factor Borello test) would apply.  This decision will have a major impact on industries throughout California and employers should evaluate their current independent contractor classifications to ensure they are consistent with the Supreme Court’s decision.

For more information about the impact of the new standards, please contact us at 562-901-2500 or e-mail us at info@KriegerLaw.com.

MINIMUM WAGE INCREASES

Effective July 1, 2017, the minimum wage has increased to $12 per hour for employers with 26 or more employees in the City of Los Angeles, unincorporated parts of Los Angeles County, Malibu, Pasadena, and Santa Monica.  For more information regarding compliance with minimum wage laws, please contact our office.

CALIFORNIA TRIES TO CLEAN UP SICK LEAVE LAW

In an effort to clean up California’s new sick leave law, the California Legislature passed AB 304, which was then signed by the Governor.  Among other things, the new law expands acceptable methods of sick leave accrual, and eases calculation of sick leave pay for employees with different rates of pay.  The new law takes effect immediately.

For more information about the impact of the new law or the amendment, please contact us at 562-901-2500 or e-mail us at info@KriegerLaw.com.

COURT REJECTS OUT OF STATE FORUM SELECTION CLAUSE

In the case of Verdugo v. Alliantgroup, L.P., decided on May 28, 2015, the Court in the Fourth Appellate District addressed the validity of a forum selection clause selecting a county in Texas as the exclusive forum for resolution of disputes regarding an employment contract. Specifically, the Court addressed whether such a clause was valid for disputes regarding California wage claims.

The Court ruled that California’s public policy precluded enforcement of such a clause for claims arising under the California Labor Code. However, the Court did not address application of its ruling to other California statutes, leaving such questions for future litigation and decisions in the Fourth Appellate District and in other courts.

For more information about the application of this case and its impact, please contact us at 562-901-2500 or e-mail us at info@KriegerLaw.com.