California Assembly Bill 5 “Gig Worker Rule” Lawyer in San Diego
Unfairly Misclassified as a Contractor? We Want to Help You Receive the Compensation You Deserve.
After January 2020, it will be much harder for companies to classify part-time, flexible, or even full-time workers as “independent contractors.” Assembly Bill 5 (AB5) rewrites California employment law to assume all hires are full employees. If a company wants to treat them as independent contractors, it must prove they can be qualified as such. A recent audit of California employees found that almost half a million workers in the state have been misclassified by their employers. If you are one of them, you may be able to make a claim to recover the wages your employer should have been paying you.
Call Leigh Law Firm today at (619) 473-7569 to speak to our experienced employment attorney or contact us online.
The Problem of Worker Misclassification
With the rise of gig work, many Californians have picked up additional jobs on the side to support themselves or their families. Whether driving for Uber, delivering food with Postmates, or finding dog-walking jobs through Wag, these flexible part-time gigs can help bring in extra money. For other workers who can’t meet the demands of full-time jobs, work in these arenas can help them participate in the labor market.
Consumers may love the benefits of fast grocery delivery and cheaper taxi rides, but increased convenience at low costs comes with a price. There’s nothing about these companies that makes their methods more efficient than their competitors’. They can charge less because they’ve figured out how to get away with underpaying workers: They misclassify them as independent contractors.
The Difference Between Independent Contractors and Full Employees
If you are a full employee, your employer is required by law to provide certain rights and protections. In California, this includes:
- Hourly pay that is minimum wage or higher
- Overtime wages
- Coverage by workers’ compensation insurance
- Reimbursement for work expenses
- Paid sick leave and family leave
- Payment of half an employee’s Social Security taxes
- A 10-minute break every 4 hours of work, and a 30-minute meal break after 5 hours of work
Independent contractors must pay all their own taxes and do not have a safety net to cover illness or family caregiving duties. Providing these benefits can add 30% to employment costs, so companies have tried to dodge them hiring workers as independent contractors instead of employees. Many Californians now live in an unstable employment situation with no buffer should tragedy strike.
The Three-Point Test for Independent Contractors
Misclassifying employees doesn’t only hurt the working and middle class. It’s also bad for our government, as it allows companies to pay less in taxes. However, enforcing employee protections has been difficult, as many workers either don’t know their rights, are scared to report violations, or don’t know how to do so.
In April of 2018, the California Supreme Court handed down a decision in Dynamex Operations West, Inc. v. Superior Court of Los Angeles (typically shortened to Dynamex) that simplified the process of determining whether a worker should be considered an employee or an independent contractor. The conditions are:
- “[T]hat the worker 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; and
- that the worker performs work that is outside the usual course of the hiring entity's business; and
- that the worker is customarily engaged in an independently established trade, occupation, or business of the same nature as the work performed.” Dynamex Operations W. v. Superior Court, 4 Cal.5th 903, 957 (2018).
If a company cannot prove all 3 of these points, the court ruled, they must treat a worker as a full employee and provide them with the required wages and benefits.
Now, AB5 has written these rules into employment law to make it easier for workers to challenge misclassification. If you are being treated as a contractor even though you do not meet all 3 conditions above, you could be able to sue for back pay.
“Gig Worker” Companies Are Spreading False Information
Companies like Uber, Lyft, Instacart, Wag, Rover, DoorDash, GrubHub, and many others that rely on classifying workers as contractors to make their business model work are worried AB5 will cut into their profits. They’ve asked for exemptions from the law and been denied. They have also put large amounts of resources toward convincing the gig workers they employ that the bill is bad for laborers.
Most of what they’re saying isn’t true. They just don’t want to pay the increased expenses associated with treating gig workers as full employees. Don’t fall for these myths meant to cheat you out of money:
- If treated as employees, workers would have their schedules set by the app – FALSE. Because companies have to prove all three points laid out in Dynamex to consider someone an independent contractor, they could easily let workers be “free from the control and direction of the hiring entity” while offering them the benefits employees deserve.
- Anyone who provided services through an app-based platform would have to work full-time for that app – FALSE. “Full” employee is different from “full-time” employee; many part-time or flexible employees are protected in full by California labor laws and have taxes deducted from their paychecks by their employer.
- Employees would be banned from working for competitors as a full employee – FALSE. Uber, Lyft, or any other app could choose to add this clause to an employment contract, but there is nothing in AB5 (or any other employment laws) that necessitates this.
As these companies continue their attempts to fight AB5, they will likely spread more lies about what the law requires. You can always speak to a lawyer if you’re not sure whether they’re telling you the truth.
Help with Your Misclassification Suit
Thanks to AB5, cities and even the California Attorney General can bring lawsuits against companies who misclassify their workers. However, you don’t have to wait for one of them to take on your case. We can help you bring a civil suit against an unscrupulous employer to recover compensation for the wages, overtime, and benefits they should have paid you.
Contact Leigh Law Firm today for a free consultation on your AB5 case. We’re just a call away: (619) 473-7569.