The California Supreme Court declared Thursday that worker classification standards set forth in its Dynamex decision should apply retroactively to a labor class action from 15 years ago, as well as all non-final cases that predate the 2018 landmark ruling.
Since April 2018, when the California Supreme Court issued its
Dynamex Operations West, Inc. v. Superior Court, 4 Cal. 5th 903 (2018) decision, which radically changed the way in which courts differentiated between an independent contractor and employee in California, businesses have grappled with the ever-expanding grip of that decision. One of the key questions, unaddressed in the
Dynamex decision, was whether it was intended to be applied retroactively. Litigants have been grappling with this question for almost two years. Yesterday the question was answered. More specifically, in
Vasquez v. Jan-Pro Franchising, Inc., 2021 WL 127201 (Cal.),(Jan 14, 2021) the California Supreme answered the Ninth Circuit’s call to determine whether the Dynamex independent contractor test (commonly referred to as the A-B-C test) should be applied retroactively. The answer is yes.
Friday, January 15, 2021
In
Vazquez v. Jan-Pro Franchising International (Vazquez), the California Supreme Court answered “Yes” to the Ninth Circuit’s question, “Does your independent contractor ABC test in
Dynamex Operations West, Inc. v. Superior Court (Dynamex) apply retroactively?”
In 2018, the
Dynamex Court concluded that under California wage orders, anyone who performs work for a business is presumed to be an employee entitled to the protections afforded by the wage orders.
The
Dynamex Court also held that a hiring entity can avoid that presumption of employment and wage order application when it comes to independent contractors, but only if the hiring entity establishes:
January 12, 2021
This past year saw the enactment of a variety of new employment laws in California, including new disclosure requirements for employers and changes to the independent contractor landscape. In addition, the COVID-19 pandemic has touched nearly every sector of society, in nearly every corner of the world, and employment law in California is certainly no exception. The pandemic has ushered in a new legal landscape marked by heightened requirements for employers stretching from 2020 into 2023.
Below, we outline four new laws that require attention from California employers in the new year: (1) the new requirements for California employers in reporting wage and hour data; (2) the continuing evolution of the worker classification standard and the recent passage of Proposition 22; (3) the new COVID-19 notice requirements that will require employers to notify employees of possible exposure; and (4) the new Workers’ Compensation Disputable Presumption under SB 1159. We a
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The impact of the legal definition of “employee” versus “independent contractor” under the Fair Labor Standard Act (“FLSA”) and other employment laws cannot be understated. The FLSA’s minimum wage and overtime requirements along with a vast array of other legal obligations employers owe to employees simply do not apply to independent contractors. Unhelpfully, various regulatory agencies and courts have looked in the past to similar, but not quite identical, tests of independent contractor status. With so much riding on the right classification both in terms of lawsuits and dollars, any clarification of which test an employer should look to is absolutely critical guidance to U.S. businesses.