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Employee Rights–Misclassification as Independent Contractor

Employee Rights: California employees misclassified as independent contractors seem to present low-hanging fruit to Calfiornia employers.As California’s largest employee-only law firm, we’ve seen just about all variations on this theme that employers can throw at the public.  A case has just denied these seedy employers the use of this device and clarified some definitional terms. The case is People of California vs Pac Anchor Transportation, filed by the Calfiornia Supreme Court on July 28, 2014.

This last word from the Cal Supreme Court holds that the Federal Adminsitration Authorization Act of 1994 does not pre-empt misclassification challenges under this federal law prohibiting state or local regulation of “price, route or service”.and the State may sue for violations of the Unfair Competition Laws. The company classifies their drivers as contractors, yet they own no trucks, do not use their own tools or equipment and invest no money in the oepration. They work for no one else and take all instructions, including delivery schedules, from the company. The court also noted that the drivers are an integrated part of defendants’ trucking business because they engage in the “core” activity of the company,deliverying goods.

Under the Supremecy Clause of the US Constitution, art VI, cl 2, the federal law of the land pre-empts, or replaces, state law.  In finding no pre-emption here, the court noted that California simply sought to regulate employer practices in regard to proper classification of employees so that the requisite benefits would flow to these workers. The court took strong exception to the employer’s argument that a finding in favor of the state would result in the company not being allowed to use contractors. Nothing in the enforcement of the Unfair Competition Law prohibits the use of independent contractors, just so long as these workers are truly “independent” and therefore would not be under the jurisdiction of the California Industrial Welfare Commission.

By not properly classifying these drivers  and denying them employee rights, the defendant company lowered their costs to the detriment of other competitors, and did not pay unemployment insurance tases (Unempl. Ins. code Sectio 976); pay employment traingin fund taxes; withhold state disability insurance taxes or provide workers’ compensation (Labor Code 3700); did not provide written itemized wage statement; provide certain records under the Industrial Welfare Commission wage order 9-2001; reimbursrese employee sofr business coss and lossses; ensure payment of the minimum wage.

Numerous cases are filed by our office throughout California for misclassification and for the inevitable retaliation and wrongful termination of these so-called “independent contractors” when they speak up. If you are retaliated against, wrongfully terminated, or otherwise treated adversely, Call us NOW! Hey, let’s be careful out there! Steve 877 789-9707.