What is employee misclassification and why does it matter?

Employee misclassification occurs when an employer labels a worker as an independent contractor instead of an employee to avoid paying benefits, overtime, payroll taxes, and workers’ compensation insurance. Under California’s ABC Test (established by the Dynamex decision and codified in AB 5), a worker is presumed to be an employee unless the employer can prove all three of the following:

• (A) The worker is free from the control and direction of the hiring entity
• (B) The worker performs work outside the usual course of the hiring entity’s business
• (C) The worker is customarily engaged in an independently established trade or business

If you’ve been misclassified, you may be owed unpaid overtime, missed meal and rest break premiums, expense reimbursements, and other benefits. Arnold Law Firm can evaluate whether your classification is proper.