Ignorance Is Not Bliss: The Realities of Co-Employment & Worker Classification in the “New” Economy

2018 was a busy year for employment law. We’re all finding ways to comply and we’re doing it in a period when the talent pool is the smallest it’s ever been. Now is not the time to shy away from using temporary employees, contractors, or independent contractors. If you do, you might end up with a lot of unfilled jobs. While the nature of work is changing rapidly in our “New” Economy, companies should not ignore the issues of Co-Employment and Independent Contractor compliance.

One of the most important cases concerning worker classification happened in April 2018: in the landmark decision of Dynamex Operations West, Inc. v. Superior Court of Los Angeles, No. S222732 (Cal. Sup. Ct. Apr. 30, 2018), the California Supreme Court unanimously announced a new test for determining whether a worker is an employee or an independent contractor. The Court adopted a standard that presumes that all workers are employees instead of independent contractors. The burden is now on any entity that classifies an individual as an independent contractor. Under the newly adopted ‘ABC test,’ a worker is an independent contractor to whom a wage order does not apply only if the hiring entity establishes all of the following:

  • (A) that the worker is free from the control and direction of the hirer in connection with the performance of the work, both under the contract for the performance of such work and in fact;
  • (B) that the worker performs work that is outside the usual course of the hiring entity’s business; and
  • (C) that the worker is customarily engaged in an independently established trade, occupation, or business of the same nature as the work performed for the hiring entity.

In the area of co-employment, the National Labor Relations Board (NLRB) issued a proposed rule last September that would reverse the NLRB’s 2015 Browning-Ferris Industries decision and clarify the standard for joint employment. The comment period for the proposed rule closed on December 13, 2018, and a final ruling is expected sometime in 2019.

Upcoming Webinar

We want to help you gain the knowledge and understanding you need to ensure your organization is up-to-date on traversing the realities of co-employment and worker classification in the new economy. Denis Kenny, Attorney and Partner with Scherer, Smith, and Kenny, and Connie Wendt, VP Compliance & Relations, ClearPath Workforce Management, will be co-hosting a webinar, Ignorance Is Not Bliss: The Realities of Co-Employment & Worker Classification in the “New” Economy.

We’ll look at the Co-Employment and Worker Classification landscape and recent legislative updates that could affect your organization. This webinar is designed to provide you with an overview of the issues surrounding co-employment and worker misclassification, understanding the landscape, and what you can do about mitigating your risk.

Date: Thursday, February 7th, 2019
Time: 11:00 AM PT/12:00 PM MT/1:00 PM CT/2 PM ET

Register Today!

ClearPath Workforce Management risk mitigation services bridge the gaps where fear of risk may prevent engagement of top talent. ClearIC™ can automate and simplify the Independent Contractor evaluation process while mitigating your risk.

ClearPath has partnered with Scherer, Smith & Kenny LLP since 2001. We highly recommend this firm, as they are easy to work with and very responsive. If you have any legal questions, you can contact Denis Kenny at dsk@sfcounsel.com, Ryan Stahl at rws@sfcounsel.com, or John Lough, Jr. at jbl@sfcounsel.com.

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