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Are you losing out on money for your retirement? Misclassification can do that!

California’s wage orders contain a multi-faceted and broad definition of who is an employer. (See Martinez vs. Combs, 49 Cal.4th 35 (2010)).  In that case, the employee asserted a cause of action under our Labor Code and the parallel Industrial Wage Order. The court found that the wage order’s definition controlled. See also Brinker’s vs. Sup Court, 53 Cal.4th 1004 (2012) which clarified that wage orders are entitled to the same dignity as statutes. This classification can be critical in determining whether you receive meal and rest breaks, overtime (at time and a half

So, bottom line, who is an employer under the wage orders? Ask yourself if your “employer” fits into one of thee definitions:

1.  Does my employer, directly or indirectly, control my wages, hours, or working conditions? This test is much more liberal than the old common law test and makes it easier to prove that independent contractors are mis classified.

2. Does my “employer” “engage, suffer, or permit me to work? This standard, according ot the Martinez decision, was intended to reach irregular working arrangement that a business owner “might otherwise disavow…”

3. Does my “employer” control the manner and means of how I work? Include in this the traditional common law tests of whether you can work elsewhere (pretty hard to do if you punch in at 8:30 and stay until 4:30); who provides the tools of the trade; whether the work you do is within the “core” business description of the company; whether the norms of your profession generally consider your work to be as an employee or as an independent contractor.

As reported in a recent Daily Journal article, a 2012 Treasury Department survey found that mis classification can cost you up to $4,000 per year in lost unemployment, Social Security and Medicare. Failure to properly classify can also subject your employer to a statutory penalty of up to $25,000 for “wilfull” misclassification. In several situations, this has led to class actions, such as against delivery companies such as Fed Ex Ground and other companies. Employees who complain about mis classification and are fired, demoted or otherwise treated adversely may be entitled to whistle blower protection and coverage under California Labor Code 1102.5

As California’s largest employee-only law firm (from San Francisco to San Diego), we would love to chat with you about your situation. Please contact us on line or CALL and let’s talk. 877 789 9707