Discrimination of Contract Workers & Wrongful Termination of Freelancers

Is the relationship of the independent “Gig worker”, (contractors, freelancer’s or sole proprietors) a mutual business relationship or employer to employee?

In today’s economy, many people have decided to work at their own pace and option. These independent thinkers have also chosen to have the freedom to provide work to other businesses, offering companies their own expertise to reach the goals of the hiring company.

Lawyer James Urbanic says, “This new type of contract worker economy continues to grow especially after the recent pandemic.” There’s a substantial challenge of interpreting and following California employment laws.

Single person businesses are those that provide some measure of service to another business while doing it at their own pace and option. The problem can often arise that these independent service providers can reach a point of familiarity and comfort in their relationship with a business that the question arises, could the independent contractor be considered more of an employee?

In order to interpret this relationship between the independent contractor and business, the state of California passed a new Labor Code in 2020. In section 2750.3 of the Code, it provides an attempt to define employment relationships in California. The new Code introduces a method to determine whether an employment relationship exists between a business and a “business server provider”.

In summary, this Code provides two methods of determining this relationship.

  1. The Right to Control Test: This test concentrates or measures whether the contracting business had the right to control the manner and means of accomplishing the work performed.
  1. The ABC Test: Here the worker must be free from the control and direction of the hiring business in connection with the performance of the work; the worker must perform work that is outside the usual course of the hiring entity’s business (e.g., plumber fixing a leaky pipe in a restaurant); and the worker must be performing his or her own established business.

Even though employees and independent contractors perform comparable work, their relationship to the company is quite different. They are also treated very differently under the law. Being such, Independent contractors are not protected by workplace antidiscrimination laws, wage and hour laws, and/or family and medical leave protections. Also, independent contractors cannot access either unemployment insurance or worker’s compensation benefits. This is particularly unsettling when an independent contractor finds herself reporting to the same place, working the same hours and performing the same tasks as her “employee” equivalent.

If you are in doubt about these new complex labor laws or need help in defending your contract work to business rights, please contact a Discrimination Lawyer.

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