New Definition of ‘Employee’ Effective January 1 in CaliforniaBy Kenton Koszdin Law Office on January 10, 2020 | In Law & Information
Effective January 1, a new law becomes effective in California that will help determine a worker’s employment status.
With the new law, a worker is considered to be an independent contractor only if the entity paying the worker (the payor) can verify all three of these factors:
- The worker is free from the direction and control of the payor for performance of the work, both under the contract and in fact;
- The worker does work that is outside of the usual course of the payor’s business; and
- The worker must be customarily engaged in an independently established occupation, business or trade of the same nature as that performed for the payor.
An important aspect of the new law is that it automatically classifies a worker as an employee if the worker does work that is part of the usual course of the payor’s business. For example, someone working on a film will be an employee of the film company since the business of a film company is to make films.
The net effect of the new law is to expand the numbers of those workers who are classified as employees.
There are many professions that are identified as exceptions to the new law including physicians, lawyers, architects, engineers, and investment advisors. These workers will continue to be evaluated under the prior 9-factor employee test.
Determining Whether a Worker is an Employee Has Significant Ramifications
When a worker is classified as an employee, the employer has major responsibilities including:
- Paying payroll taxes
- Paying Social Security (FICA) taxes
- Paying unemployment insurance taxes
- Paying state employment taxes
- Providing Workers’ Compensation insurance
- Complying with all state, federal and local statutes governing employment such as minimum wage and sick leave
We Can Help You Gain the Social Security Disability Benefits that You Deserve If you or a loved one has been denied Worker’s Compensation or Social Security Disability (SSD) benefits, it’s important to get an attorney experienced in these types of cases involved immediately. Call our Los Angeles County office at 800.438.7734 for your initial free consultation, either in our office or in the comfort of your own home. The Kenton Koszdin Law Office, Social Security attorney in Van Nuys, can help you navigate the application process for the best possible outcome for you and your family.