The Independent Contractor Test and California Workers’ Compensation
Workers’ compensation is a vital safety net for employees who suffer injuries on the job. However, not everyone who works for a company is automatically considered an employee under California law. One of the most hotly contested issues in workers’ compensation claims is whether the injured worker is an employee or an independent contractor. This classification determines whether the worker is entitled to workers’ compensation benefits.
California has strict rules for classifying workers, and in recent years, those rules have become even more worker-friendly. If you think you are being misclassified as an independent contractor and denied workers’ compensation benefits because of it, an experienced workers’ comp lawyer can ascertain whether you are being treated fairly or not. In Orange County and the Inland Empire, contact Invictus Law, P.C., to speak with a knowledgeable and experienced California workers’ compensation specialist.
Why Worker Classification Matters
Employees in California are entitled to workers’ compensation coverage when they’ve been injured on the job, which includes medical care, disability benefits, and more. Independent contractors, by contrast, are not covered by workers’ compensation insurance. As a result, employers may be motivated to misclassify workers as independent contractors to reduce costs.
If a worker who has been classified as an independent contractor gets hurt on the job, they might still be able to argue that they were misclassified and should be eligible for workers’ compensation benefits. That determination depends largely on how the worker is classified under California law.
The ABC Test: California’s Standard for Worker Classification
In 2019, California passed Assembly Bill 5 (AB 5), which codified the “ABC Test” for determining whether a worker is an independent contractor or an employee. This test presumes that a worker is an employee unless the hiring entity can prove all three of the following conditions:
- The worker is free from the control and direction of the hiring entity in connection with the performance of the work, both under the contract and in practice.
- The worker performs work that is outside the usual course of the hiring entity’s business.
- The worker is customarily engaged in an independently established trade, occupation, or business of the same nature as the work performed.
If the employer cannot satisfy all three prongs of the ABC Test, the worker must be classified as an employee and therefore qualifies for workers’ compensation benefits.
Applying the ABC Test in Real-World Situations
Let’s say a delivery driver is injured while making deliveries for a restaurant. If the restaurant classifies the driver as an independent contractor, the driver may challenge that classification using the ABC Test:
- Control: Does the restaurant dictate the driver’s schedule, route, or how the job should be performed?
- Usual course of business: Is delivering food a core function of the restaurant’s business?
- Independent business: Does the driver operate their own delivery company, work for multiple clients, and advertise their services independently?
If the answer to any of these questions supports the idea that the worker is not truly independent, then the worker may be deemed an employee and eligible for workers’ compensation.
Exceptions to the ABC Test
While the ABC Test is the default standard, some professions and relationships are exempt and instead evaluated under the more traditional “Borello Test” from the California Supreme Court’s decision in S.G. Borello & Sons, Inc. v. Department of Industrial Relations. These exemptions include certain licensed professionals, real estate agents, and business-to-business relationships that meet specific criteria.
The Borello Test focuses on multiple factors, with the most important being whether the employer has control over the manner and means of the work. Other considerations include:
- Whether the worker supplies their own tools or equipment.
- The degree of supervision required.
- The method of payment (e.g., by the job or by the hour).
- Whether the work performed is integral to the business.
This multi-factor test is more flexible but also more unpredictable, which is why AB 5’s ABC Test is generally favored for clarity and consistency.
Workers’ Compensation Claims and Misclassification
If you’ve been injured while working and your employer claims you’re an independent contractor, it’s essential to challenge that classification if you believe it’s inaccurate. The Workers’ Compensation Appeals Board (WCAB) and courts have the authority to look beyond job titles and contracts to determine the true nature of the working relationship.
Many workers successfully challenge their classification and receive the benefits they deserve. These benefits can include:
- Payment for medical expenses.
- Temporary or permanent disability benefits.
- Vocational rehabilitation services.
You don’t have to accept your employer’s classification at face value. The law focuses on the realities of the working relationship, not the label used by the employer.
The Role of Legal Counsel in Classification Disputes
Disputes over worker classification can be complex and highly fact-specific. Employers and insurance carriers often fight back hard against claims from workers they’ve labeled as independent contractors. That’s why it’s crucial to have experienced legal representation.
At Invictus Law, P.C., we represent injured workers throughout Orange County and the Inland Empire, including those facing classification challenges. We investigate the facts of your working relationship and use California’s legal standards to argue for proper classification and full workers’ compensation coverage where applicable.
Contact Invictus Law, P.C. Today
If you’ve been injured on the job and were told you’re an independent contractor, don’t assume you’re out of luck. You may have been misclassified, and you may be entitled to workers’ compensation benefits. Let the experienced workers’ compensation attorneys at Invictus Law, P.C. help you understand your rights and fight for the benefits you deserve. Contact us today for a free consultation.
