Dynamex and Its Effect on Worker Classification

The 2018 Dynamex Operations West v. Superior Court of Los Angeles County from the California Supreme Court upended decades of precedent by setting out a new, stringent, three-factor test to determine proper worker classification for purposes of California’s wage order rules. In 2019, the Ninth Circuit applied Dynamex retroactively. But then they reversed that ruling and returned the question to the California Supreme Court. Also in 2019, Assembly Bill No. an attempt to codify the Dynamex test, is before the California Senate. So where does that leave employers and employees in California? The information currently available on the issue conflicts – we’re still working towards a standard practical application of the Dynamex ruling.

First, it’s important for employers and California employees to remember that worker classification affects numerous areas: wage and hour, employee benefit plan participation under the Employee Retirement Income Security Act (ERISA), state and local laws not preempted by ERISA, and federal income and employment laws. Each area applies specific tests that determine a standard regarding whether or not any particular worker’s proper classification: employee or independent contractor. The recent developments apply specifically to wage and hour law.

California employers need to review how they classify workers for all purposes. They should also consider the fact that there are different tests that apply for classification in different areas of employment law and some are stricter than others. If a California worker is considered an employee for wage and hour purposes, they are entitled to all the protections California state law offers as well as the protections of the FLSA (including minimum wage and overtime).

As Dynamex continues to make waves across California, employers need to be taking a really good look at how they classify their workforce, each of their workers under the different tests, and pinpoint exactly how they can manage their workers to comply with both state and federal wage and hour law.

If you have a misclassification claim, please get in touch with Blumenthal Nordrehaug Bhowmik De Blouw LLP, our employment law attorneys. Our California employment law attorneys prepared to be your advocate, making sure you get ALL of the wages you are owed when your employer violates California labor law.