According to the California Supreme Court, Dynamex Applies Retroactively
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When the Ninth Circuit asked the question, “Does your independent contractor ABC test in Dynamex Operations West, Inc. v. Superior Court (Dynamex) apply retroactively?” in Vazquez v. Jan-Pro Franchising International (Vazquez), the California Supreme Court’s answer was “Yes.”
The Court’s Conclusions in the 2018 Dynamex Case:
In 2018, in relation to the Dynamex case, the Court concluded that under California wage orders, workers are presumed to be employees entitled to the protections afforded by wage orders, and that an employer can avoid this presumption for independent contractors if they are able to establish certain standards.
Standards Required to Classify a Worker as an Independent Contractor:
In order to avoid the presumption of employee status and wage order protections, employers must establish that the worker is an independent contractor if:
The worker is free from the employer’s control and direction when it comes to completing their work (both under the employment contract and in fact),
the worker performs a job that is outside the employer/company usual course of business, and
the worker is usually engaged in a trade that is independently established and the same type of work they perform for the employer.
The “ABC Test” detailed above was codified into California state law by Assembly Bill 5, known as AB 5.
Before the ABC Test California Employers Used the Borello Test:
Prior to Dynamex and the ABC Test, California courts and employers used a different, multifactor test referred to as the Borello Test (S.G. Borello & Sons, Inc. v. Department of Industrial Relations). The Borello test focused on how much control an employer had over a worker based on multiple factors. The more control the test indicated an employer held over a worker, the less likely the worker would be classified as an independent contractor.
The ABC Test is More Stringent than the Previously Used Borello Test:
The ABC Test provides a stricter set of standards allowing a California worker to be appropriately classified as an independent contractor. Since the standards set by the new test are more strict, many California employers argue they shouldn’t be held to the newer standard in misclassification lawsuits predating the Dynamex opinion that set the standard. However, the California Supreme Court disagreed with the Vazquez case. The court concluded that there was no reason to depart from the generally accepted rule that judicial decisions are considered retroactive.
If you need to discuss misclassification or if you need to file a California misclassification lawsuit, please get in touch with Blumenthal Nordrehaug Bhowmik DeBlouw LLP. Experienced employment law attorneys are ready to assist you in any one of various law firm offices located in San Diego, San Francisco, Sacramento, Los Angeles, Riverside, and Chicago.
