Employee Misclassification: The Real Impact of the Dynamex Decision

With the rise of the Gig Economy, many companies have engaged independent contractors to accomplish many tasks previously handled by employees. However, the California Supreme Court recently broke new ground in providing protections to California workers, by making it much easier for a worker to qualify as an employee, subject to the protections of Wage Orders, as opposed to an independent contractor, with no such protections. California’s Wage Orders set worker protections relating to minimum wage, maximum hours, and a limited number of very basic working conditions (such as minimally required meal and rest breaks).

In the case of Dynamex Operations W. v. Superior L.A. County, the Supreme Court adopted a much broader standard, holding that to “employ” means to “suffer, or permit to work.” The Court held that this definition must be interpreted broadly to treat as “employees,” and thereby provide the wage order’s protection to, all workers who would ordinarily be viewed as working in the hiring business under the new “ABC” test. The new classification standard will make it easier to find liability for misclassifying workers as independent contractors.

This is a ruling that could impact thousands of employers who may have misclassified employees. Join us as Klinedinst employment attorneys Susan Chelsea and Patrick Goode review the impact of the Dynamex ruling, outline the new classification standards that employers must abide by, and provide real-world guidance to help you ensure full compliance with this wide-ranging ruling.