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Independent Contractors And Workers' Compensation: California's Top Court Makes It Harder To Misclassify Employees
If you have been injured in the workplace and want to get workers' compensation benefits, do not hesitate to contact an Los Angeles on the job injuries attorney at The Law Offices of Kropach & Kropach, A Professional Corporation.
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Independent Contractors And Workers Compensation: California’s Top Court Makes It Harder To Misclassify Employees
17 May 2018 | William J. Kropach | On The Job Injury

It looks like the problem of injured workers not being able to recover workers compensation benefits due to being classified as “independent contractors” is fading away.

A recent ruling by the California Supreme Court has made it more difficult for employers to classify their workers as “independent contractors,” which is a common practice adopted by California employers to avoid paying payroll taxes and workers comp premiums, as well as allows businesses to circumvent federal and state rules on minimum wage, overtime and rest breaks.

In recent years, businesses in Los Angeles and all across California have been classifying and misclassifying their workers as “independent contractors” at an exponential rate, says our Los Angeles on the job injuries attorney at The Law Offices of Kropach & Kropach, A Professional Corporation.

Fact: Experts estimate that independent contractors make up nearly 9 percent of the American workforce.

But the ruling by the California Supreme Court may change this once and for all, as businesses across the state are expected to reclassify their existing workers from independent contractors to “employees” and ditch the practice of classifying workers are independent contractors to avoid liability in workers compensation cases in the first place.

Why do employers misclassify employees as independent contractors?

What’s the big deal with businesses classifying their workers as independent contractors?” you may be wondering. You see, among many other things, independent contractors are not eligible for workers compensation benefits. Employers in Los Angeles and all across California are required by law to purchase workers comp coverage only for employees, but not for independent contractors.

This prompts many employers in California to misclassify their employees as independent contractors in a bid to avoid paying workers compensation premiums and avoid liability in case of on-the-job injuries.

It often happens that workers think they are employees and are entitled to workers compensation benefits, but when they get injured in the workplace and file a workers comp claim, they are surprised to discover that they were misclassified by their employer as independent contractors. And this results in denial of workers compensation coverage for such workers.

Get workers comp benefits as an independent contractor

But the problem of employers misclassifying their workers as independent contractors may soon become a relic of the past, as the California Supreme Court has recently ruled that in order to classify a worker as an “independent contractor,” employers in Los Angeles and elsewhere in California will have to demonstrate that the worker is free of direction and control of the employer. In addition to that, businesses will have to show that such a worker performs his/her duties outside the employer’s core business, and engages in “an independently established trade, occupation or business.”

The problem of worker misclassification has been prevalent at ride-sharing companies such as Uber and Lyft as well as the construction industry. The ruling is expected to prompt many employers all across California to rethink their hiring strategies and consider reclassifying independent contractors in order to avoid paying fines for misclassification.

If you have been injured in the workplace and want to get workers compensation benefits but found out that you were misclassified as an independent contractor, do not hesitate to contact an Los Angeles on the job injuries attorney at The Law Offices of Kropach & Kropach, A Professional Corporation.

There still might be a way to receive workers compensation benefits if your lawyer can prove that the nature of your work for the employer indicated that you are an employee. Get a free consultation by calling our offices at 818-609-7005 or fill out this contact form.

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