A common mistake by California businesses is employee misclassification. Employee misclassification happens when an employer ties an employee to the wrong designation. For example, if you accidentally hire an independent contractor but treat them like an employee—or vice versa—then you could be in violation of federal or state regulations.

Best Practices

Because each situation depends on its own facts, companies may consider classification of employees on a case-by-case basis. Below are several best practices small business owners may consider to minimize liability:

• Consider the reasons for the engagement — ask are the individuals truly independent or do they rely on the employer and perform the same work as employees – in making the decision to engage a contractor or hire an employee.
• Review independent contractor agreements with an attorney, and ensure each contains clear scopes of work.
• Avoid treating independent contractors like employees. For example, avoid dictating work schedules, asking them to clock in/out of work, and paying by the hour, limit providing contractors with uniforms, company email addresses, or access to non-essential trainings.
• If operating in multiple jurisdictions, abide by the appropriate test in each state.
• Seek an expert's opinion in tricky situations, or err on the side of classifying the worker as an employee.

Because these situations are extremely fact specific, it is important to speak to an experienced employment attorney about your situation to determine if you have a case. Contact Luna Legal Firm P.C. for a free phone consultation at info@lunalegalfirm.com.

Disclaimer: This is attorney advertising. This does not constitute a guarantee, warranty, or prediction regarding your legal matter. This does not constitute legal advice, nor does it create an attorney-client relationship. This is intended to serve as general public information. The laws on these subject matters change periodically, thus this information may not be up to date. Advertising by Luna Legal Firm P.C., 16501 Ventura Blvd. Suite 400, Encino, CA 91436.