Showdown - California vs. 1099 Contractors

A recent California Superior Court decision vs. Dynamex Operations West, Inc. puts a tremendous burden of proof on employers in two ways:

1.      All workers are presumed employees. 

2.      The burden of proof falls on employers to establish that independent contractors meet a           simplified set of three criteria:

 i.          Control & Direction - The worker is free from such guidance by the company.

ii.          Work Type - The work performed by the independent contractor differs from that of the company.

iii.         Independent Trade - The worker has established independent business services same as the work performed for the company. 

In stating that contractor services must differ from that of the company it essentially does not allow the use of 1099 workers to supplement the workforce while performing the same type of work.  An example of this would be - assuming all other criteria met - that a trucking company could outsource janitorial services for its office cleaning, but could not outsource a truck driver for deliveries. 

Stay tuned for a large-scale, anticipated litigation to come from industry association groups that will challenge this decision.  But for now, you can find more about the full decision below: 

http://www.courts.ca.gov/opinions/documents/S222732.PDF

Article Written By:

Jamie Reid

C3 Complex Comp Lead

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