What is the difference between an independent contractor and an employee?
Employees receive certain benefits that independent contractors do not receive. For example, overtime laws apply to employees, but they don't apply to independent contractors. Unemployment applies to employees, but not to independent contractors.
And there are many other different benefits that apply strictly to employees, like leaves, that don't apply to independent contractors. Often times employers will try to misclassify employees as independent contractors so they don't have to give them the benefits and they don't have the rights of the employees. If that happens, it's important you speak to an attorney who can help get you the compensation that you deserve and make sure that the employer classifies you properly in the future.
The test California actually uses
Federal law and many other states mostly ask how much control a company has over the work. California goes further: the law presumes a worker is an employee unless the business can show the person is free from the company's control, performs work outside the company's usual line of business, and independently runs their own established trade. This stricter standard is often called the ABC test, and it sets a higher bar than the tests used elsewhere.
A signed "independent contractor" agreement, a 1099, or even the worker's own preference doesn't settle the question. What matters is the real working relationship, not the label on paper.
What misclassification really costs
Beyond the issues already covered, misclassified workers can also lose out on workers' compensation coverage, paid sick leave, meal and rest break protections, reimbursement for business expenses, and payroll tax contributions an employer would otherwise make on their behalf.
What to do next
Keep track of your schedule, who directs your day-to-day work, and any equipment the company requires you to use. An employment attorney can review the relationship and help determine whether you've been classified correctly.
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