Page 4 - Misclassification of Independent Contractors Booklet

I. Legal Overview
Historically, in California the principal test to determine whether an individual is an employee or an independent contractor is the right to control. The theory is that employees are controlled in the manner and means of performance, whereas independent contractors are only directed as to the results. Thus, in California there is no bright line test to establish if a particular worker is an independent contractor.
Despite decades of applying the common law test
to determine employment status, some courts have recently applied the Martinez “employ” test to certain Labor Code claims. In Martinez v. Combs (2010) 49 Cal.4th 35, the California Supreme Court held that
to “employ” and thus be an “employer” has three alternative definitions: “(a) to exercise control over the wages, hours or working conditions, or (b) to suffer or permit to work, or (c) to engage, thereby creating a common law employment relationship.” (The third limb of this test, is the common law test described above.) The suffer or permit standard has been interpreted
to mean whether the putative employer knew that
the individual was performing services. If this was
the correct test, it would effectively dispense with
ff2