whether the person for whom the
services or work was rendered has
the ability to control the manner and
means of the work performed. The
greater the control of the means
and methods would likely result in
a finding of an employee/employer
relationship. Additional factors
included, but were not limited to,
whether the hirer could discharge
the person “at will” which would also
support a finding of an employee/
employer relationship.
The California Supreme Court
was not inclined to continue use of
the Totality of Circumstances test.
Rather, the Supreme Court initiated
its reasoning by characterizing the
misclassification of independent
contractors as harmful to society
at large and unfair to the workers
themselves. This decision included
a long and exhaustive review of
the relevant prior decisions before
fashioning a new test. The new test
has been called the “ABC” test.
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SAN DIEGO COMMUNITY INSIDER
SUMMER 2019
Pursuant to the new ABC test, the Court begins its analysis by
noting that there is a presumption that a person is an employee for
wage or other purposes unless the hiring party can demonstrate
the following:
(A) that 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;
(B) that the worker performs work that is outside the usual
course of the hiring entity’s business; and
(C) that the worker is customarily engaged in an independently
established trade, occupation, or business of the same nature as
the work performed.
Please note that all of the above requirements must be proved
in order to demonstrate that the relationship between the employer
and the contractor has been properly classified. Each factor must
be reviewed and weighed and the employer is well advised to seek
legal counsel’s input on this issue.
Accurate resolution of this issue has always carried it with it
a potential significant impact to Common Interest Developments
(“CID”) for example, in terms of whether the landscaper working
on the drainage line is an employee or an independent contractor.
Specifically, if the person is misclassified by the CID as a contractor
and according to the law is truly an employee and the CID does
not pay payroll taxes and Social Security contributions and