Why HOA’s need workers’ compensation insurance-Part 2
The following WHO IS AN EMPLOYEE may be useful when considering a contractor.
Many employers have both employees and independent contractors. Understanding the difference is often complicated. The determination is in accordance with the state Labor Code provisions, common law, and Workers’ Compensation Appeals Board decisions. Generally, the following factors will be considered to determine if the employment status of a service of an employer is that of an employee.
The ABC Test, an employment-classification test in California that presumes workers are employees rather than independent contractors was first adopted in April 2018 by the California Supreme Court. Under this test, the burden is on the employer to demonstrate that every worker is not an employee by proving all three of the following:
A. 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. The worker performs work that is outside the usual course of the hiring entity’s business.
C. 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.
S.G. Borello & Sons, Inc. v. Dept. of Industrial Relations
For claims not brought under wage orders — such as claims based on labor statute violations — courts should continue to rely on the more flexible multistandard test adopted by the California Supreme Court in S.G. Borello & Sons, Inc. v. Dept. of Industrial Relations, the appeals court said, explaining that there “is no reason to apply the ABC test categorically to every working relationship.”
The Borello standard considers factors such as the worker’s investment in tools used, the method of payment, the degree of permanence of the relationship, and the parties’ intention regarding the relationship when determining whether a worker is properly classified as an employee or an independent contractor.
SERVICES FOR WHICH A CONTRACTOR’S LICENSE IS REQUIRED:
If a person is performing services for which a license is required, pursuant to Chapter 9 of Division 2 of the Business and Professions Code, and the person does not have such a license, he is an employee. If such a person has a license, there is a rebuttable presumption that the person is an employee that an independent contractor, unless the following can be shown:
1. That the worker has the right to control and discretion as to the manner of performance of the contract for services in that the result of the work and not the means by which it is accomplished is the primary factor bargained for.
2. That the worker is engaged customarily in an independently established business.
3. That the worker’s independent contractor status is bona fide and not subterfuge to avoid employee status. ( see California Labor Code Section 2750.5 0 )
If you would like to read more great tips, email: firstname.lastname@example.org Bill Catanese is an insurance broker since 1990. He has trained over 15,000 agents and is an expert consultant.