A California Court Just Ruled That Gig Workers Are Bona Fide Employees. Will Courts in ... - 0 views
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The court ruled in favor of the Dynamex drivers, agreeing that they had been misclassified as independent contractors and are, in fact, employees. The ruling also concluded that employers could only classify as independent contractors those workers who meet the conditions laid out in the "ABC standard" established in other states:(a) that the worker is free from control and direction over performance of the work, both under the contract and in fact; (b) that the work provided is outside the usual course of the business for which the work is performed; and (c) that the worker is customarily engaged in an independently established trade, occupation or business (hence the ABC standard).
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While some of these workers may be independent contractors by choice, others, like the Dynamex drivers, were forced into the classification by employers looking to save money. The National Employment Law Project estimates that employers can reduce payroll and other taxes by up to 30 percent by re-classifying employees. State-level studies on the issue, meanwhile, have uncovered extremely high misclassification rates—a series of audits in Ohio found that 47 percent of workers were misclassified. (This misclassification, not surprisingly, costs federal, state, and local governments hundreds of millions of dollars in lost tax revenues.)
