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Sea Change in Classification of Employees vs. Independent Contractors? (CA)

October 15, 2019

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<p style="text-align: justify;">On September 19, 2019, California governor Gavin Newsome <a href="">signed a bill into law</a> essentially reclassifying independent contractors as employees. Whereas the past classification turned on the degree of control an employer exerted on a worker, the new California test looks to whether the work performed is of the same kind as the main business of the employer—i.e., package delivery for a delivery company.  We have posted on this issue in the past, as it has pertained to a claim <a href="">against Uber</a> in Pennsylvania.</p>
<p style="text-align: justify;">In New York, Governor Cuomo spoke approvingly about passing a similar piece of legislation. A bill to reclassify independent contractors was introduced in the New York State Senate earlier this June, and a coalition including the New York Taxi Workers Alliance, the New York Nail Salon Workers Association, the Legal Aid Society, and 32BJ SEIU is currently pushing for legislation Gov. Newsome just signed in California. These statutory reclassifications of independent contractors are on paper limited to traditional employee benefits, such as overtime and minimum wage protections, workers compensation and unemployment insurance, and do not extend to tort claims, thus leaving in place the control-based test for determining whether a worker is an employee and an employer is in turn vicariously liable.</p>
<p style="text-align: justify;">In New York, the test for determining a worker’s classification for purposes of worker’s compensation is similar to that applied in a tort action: both turn on control exerted upon the worker by the employer. Although similar, the tests are not identical, and it can happen that the same worker may simultaneously be an employee for purposes of workers compensation and an independent contractor in a tort action. This apparent conflict is actually a peaceable one, and New York Courts have routinely held that a finding of “employee” for workers compensation purposes does not disturb a finding of “independent contractor” in a tort action.</p>
<p style="text-align: justify;">As a practical matter, employers might be less willing to grant a worker the same flexibility enjoyed by a contractor in matters like setting his own hours if the employer were on the hook for the various costs associated with a traditional employee. That increased control over the worker could have the result of triggering employee status within the tort law realm. This new reclassification something to keep an eye on, within and without New York State.</p>
<p style="text-align: justify;">Thanks to Jon O'Brien for his contribution to this post.  Please email <a href="">Brian Gibbons</a> with any questions.</p>



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