Worker misclassification is a serious issue in California, perhaps partially because the state’s laws are famous for providing particularly strong protections for employees. When a worker is wrongly classified as an independent contractor instead of an employee, they may be denied basic rights such as minimum wage, overtime pay, paid sick leave, workers’ compensation and unemployment benefits.
If you provide services to a California company and/or you work from California and you’re unsure whether your job classification is correct, it’s important to know about common signs of misclassification under California law.
Control and influence
One major red flag is if your employer controls how you do your job. In California, the law favors a test known as the “ABC test” for most workers. To legally classify a worker as an independent contractor, a company must prove that:
- The worker is free from control and direction in performing the work.
- The worker is outside the usual course of the company’s business, and
- The worker is engaged in an independently established trade or business.
If your employer directs your schedule, methods or performance closely, you likely qualify as an employee.
Another sign is if the work you do is a regular part of the company’s main business. For example, if a delivery app hires you to deliver food, and delivery is the core of its business, you’re likely an employee—not an independent contractor. Companies can’t avoid responsibility simply by labeling someone a contractor while relying on them to carry out key operations.
Compensation and other money concerns
Payment structure can also be a clue. Independent contractors typically send invoices and are paid per project or contract, not by the hour. If you’re paid on a regular payroll schedule and do not negotiate your rates, you may be misclassified. Also, if taxes aren’t withheld from your paychecks and you receive a 1099 instead of a W-2, that might suggest contractor status—but classification depends on your work conditions, not just your tax form.
Additionally, if you’re required to use company tools and cannot hire others to help you with your work, those are further signs that you may be an employee. True independent contractors typically supply their own tools and have the freedom to subcontract work.
Misclassification can be a truly harmful reality. Thankfully, California law is on the side of workers.