Are You Reclassified?

Are you a real estate agent, salon worker, trucker or lawyer? Do you work in or own a small business? Last year’s California Supreme Court ruling involving independent contractors may affect you. The Court changed the definition of employees and contractors, impacting businesses, the economy and the employment of thousands.

In its “Dynamex” ruling, the Court presumed that all workers are company employees and places stringent limitations on the definition of independent contractors by adopting a three-part test to determine a worker’s status. According to the new “ABC” test, workers are company employees if the company controls what they do, if their tasks are a part of the company’s core business and if the worker doesn’t run an independent business doing the same work.

Entire industries rely completely or partly on independent contractors, including companies like Lyft and Uber, salon owners, hairdressers, real estate agents, many truckers, winery workers, as well as doctors, lawyers and other professions. So far, Lyft and Uber drivers have not been re-classified, but what happens is still an open question. Franchise businesses, including many restaurants, may also be impacted.

According to a recent survey by the Bureau of Labor Statistics, fewer than 1 in 10 independent contractors prefer traditional work arrangements. Instead of letting companies and their workers negotiate the terms of their relationship, newly reclassified employees will be subject to all the stringent regulations many of them sought to avoid by becoming independent contractors. What has happened to personal choice? Not to mention the burden on small-business owners to operate a human resources department.

The Dynamex ruling impacts thousands of businesses, workers and the entire state economy. Over the coming months in Sacramento, dealing with the fallout from this decision will be the subject of intense debate.

Assembly Republican Leader Marie Waldron, R-Escondido, represents the 75th Assembly District in the California Legislature, which includes the communities of Bonsall, Escondido, Fallbrook, Hidden Meadows, Pala, Palomar Mountain, Pauma Valley, Rainbow, San Marcos, Temecula, Valley Center and Vista.