Misclassification of employees as independent contractors is a widespread issue across the U.S.—and especially in California. Whether the misclassification is due to an employer's misunderstanding of the law or a deliberate attempt to cut costs, the result is the same: workers lose critical protections, benefits, and may face unexpected tax burdens.
At Arshakyan Law Firm, we are committed to protecting California workers. If you believe you’ve been misclassified, call us today at (818) 650-9985 for a confidential consultation.
Employee vs. Independent Contractor: What's the Difference Under California Law?
California law presumes that all workers are employees unless an employer can prove otherwise. The ABC Test, established by California Assembly Bill 5 (AB5), is used to determine whether a worker is legally an independent contractor. Under this test, a worker must meet all three of the following conditions to be classified as an independent contractor:
- A: The worker is free from the control and direction of the hiring entity in connection with the performance of the work.
- B: The work performed is outside the usual course of the hiring entity’s business.
- C: The worker is customarily engaged in an independently established trade, occupation, or business of the same nature as the work performed.
Examples:
- A plumber hired by a retail store to repair pipes while also servicing other clients likely qualifies as an independent contractor.
- A receptionist working at a front desk with a set schedule, using the employer’s equipment, and not free to take other jobs likely qualifies as an employee—even if labeled otherwise.
Why Do Employers Misclassify Workers?
Many employers misclassify workers to save money. By labeling employees as independent contractors, they can avoid paying:
- Minimum wage and overtime
- Unemployment insurance
- Workers’ compensation
- Paid sick leave and family leave
- Employer payroll taxes
This type of employment misclassification is illegal under California labor law and can lead to significant penalties for the employer—and serious financial consequences for the worker.
Common Signs of Misclassification
You may be misclassified if:
- Your employer controls your schedule and day-to-day tasks.
- You do the same work as other employees, but are labeled differently.
- Your equipment, tools, or workspace are provided by the company.
- You only work for one company, without the freedom to take on other clients.
- You receive regular payments without submitting invoices.
Misclassification is especially common in industries like construction, gig work, transportation, healthcare, and entertainment, but it can happen anywhere.
What to Do If You Suspect Misclassification
If you believe you are being misclassified:
- Document Everything: Keep records of your schedule, responsibilities, how you are paid, and communications with your employer.
- Report to the EDD: The California Employment Development Department (EDD) accepts fraud reports for wage theft and misclassification.
- Consult a California Employment Lawyer: Navigating labor law can be complex. A skilled employment attorney can help protect your rights, recover lost wages and benefits, and shield you from retaliation.
Protect Yourself—Contact Arshakyan Law Firm Today
At Arshakyan Law Firm, we understand the financial and emotional stress that comes from being misclassified. You deserve fair treatment under California labor laws—and we’re here to make sure you get it.
We will help you pursue unpaid wages, proper benefits, and legal protection from employer retaliation.
Call us today at (818) 650-9985 or visit our website to schedule your free consultation. Let’s fight for what you’ve earned.