Independent Contractors

1. Independent Contractors by Bushore church real estate

2. Individuals who are “independent contractors” are not considered employees for wage and hour purposes. California Assembly Bill 5 addresses the “employment status” of workers when the hiring entity claims the worker is an independent contractor and not an employee. Additionally, Assembly Bill 2257, enacted in 2020, intended to clarify AB 5 and provide additional exemptions to the test for determining whether an independent contractor has been misclassified as an employee.

3. California’s labor law protects employees, but not independent contractors. Additionally, employees can go to state agencies such as the Labor Commissioner’s Office to seek enforcement of these laws, whereas independent contractors must resolve their disputes or enforce their rights under their contracts through other means. • When an individual is hired, the hiring entity has to pay for extra costs. However, as an independent contractor, the hiring entity issues a 1099 form to the worker and need not worry about the extra costs.

4. r example, if a worker is found to be an employee under AB 5 or AB 2257, California’s employment laws will apply to that individual and the worker will be subject to the following: • California income tax and income tax withholding • The state’s Workers’ Compensation Law • California’s Unemployment Insurance Tax • The State Disability Insurance Tax • The Employment Training Tax • Wage and hour rules that are enforced by the Department of Labor • California laws regarding benefits, including sick leave and overtime