Misclassified Contract Workers Gain Benefits Under New CA Law
When Governor Gavin Newsom signed AB5 into law, he made a decision that
could change the game for any workers currently considered “independent contractors.” The law, building off a previous
court decision, clarified the terms under which workers could be considered contractors
rather than employees. With the goal of pushing companies like gig economy
bigwigs Uber and Lyft to ensure that service providers were fairly compensated,
AB5 states that any worker who does not pass the three-part test set forth in the
Dynamex case must be classified as an employee rather than an independent contractor.
The bill outlines the three conditions:
- The person is free from the control and direction of the hiring entity
in connection with the performance of the work, both under the contract
for the performance of the work and in fact.
- The person performs work that is outside the usual course of the hiring
- The person is customarily engaged in an independently established trade,
occupation, or business of the same nature as that involved in the work
Anyone who can answer affirmatively to all three of these conditions is
an independent contractor. Otherwise, they must be classified as an employee
(unless they work in a profession that has been specifically exempted
from these rules). The law will take effect at the start of 2020.
The Difference Between Contractors and Employees
Because independent contractors are considered the architects of their
own work schedule and commitments, those who hire them do not have to
pay overtime, provide health insurance, or even ensure that their work
pays minimum wage when evaluated on an hourly basis.
Employees, on the other hand, must be provided:
- Wages equal to or above minimum wage
- Overtime pay
- Regular breaks
- Paid sick leave
- A safe workplace
- Workers’ compensation coverage
The right to file complaints or workers’ comp claims without facing
promises additional benefits, including unemployment insurance, paid leave for new parents, and employer
subsidization of healthcare costs to California employees. It’s
no wonder that many contractors are excited by what they stand to gain
from the new bill, and companies are looking for ways to challenge the
law so they don’t have to pay.
Considering Workers’ Comp as an Employee
Workers’ comp covers workplace accidents, regardless of fault, and
acts as a safety net for injured employees by covering medical bills and,
where needed, making up for missed wages and paying out for retraining
or future medical bills in the case of permanent injury. To apply for
workers’ comp, you must be able to prove that your work caused the
injury or illness you need assistance for. Beyond that, it does not matter
where fault lies.
Even in clear cases of workplace injury, insurers may deny claims or offer
compensation that does not cover related expenses. As companies that used
to rely on classifying workers as independent contractors are forced to
consider the additional costs of providing workers’ comp and other
benefits, they may fight back. If you’re looking for relief from
workers’ comp insurance and are denied the help you need, it may
be time to bring a workers’ comp expert to take on your case.
Can I Get Help for Past Job-Related Injury?
Unfortunately, though AB5 allows misclassified workers to
sue employers for not following wage law, there is no such provision for workers’ comp. You will not be able
to request reimbursement for injuries that occur before the law goes into
effect on January 1, 2020, even if they were caused by your work. If your
injury resulted in a long-term disability you may be able to seek
Social Security Disability Benefits to help with the costs that you cannot bill to your employer’s workers’
AB5 will bring many changes for employers and workers alike. Our team is
here to answer your questions and help you bring a case against your employer’s
workers’ comp should the worst happen.
Talk to a workers’ comp expert today by reaching out online
or calling (818) 946-0608.