CA Supreme Court issues decision outlining Employer vs. Contractor

California’s Supreme Court on Monday laid down three-prong test to determine whether a person is an employee of an independent contractor.

The three-part test the court created in Dynamex Operations West Inc. v. Superior Court of Los Angeles County (Lee) asks whether a worker:

• Is free from control and direction in the performance of work.
• Is performing work outside the scope of the hiring entity’s business.
• Is customarily engaged in an independently established trade.

If the answer to any of the three questions is “no,” a person is an employee subject to various labor law protections, including minimum wages, and meal and rest periods. 

Though the high court proposed the test for the purposes of wage violations, the new test could also be useful to determine whether a person is an employee who has to be covered by workers’ compensation. Such application could have far reaching implications, especially in the general-special employer scenarios.

​To read the full test of the decision click here: Decision