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Companies in California that hire independent contractors will have to prove those workers are running their own enterprises to avoid complying with states laws that govern employment, according to a state Supreme Court ruling Monday that could work in favor of those working gig economy jobs.
The case stems from two individual delivery drivers who sued package-and-document delivery company Dynamex Operations West Inc. on their own behalf and on behalf of a class of allegedly similarly situated drivers, alleging that the company had misclassified its delivery drivers as independent contractors rather than employees, thus violating California wage and worker laws in a variety of ways, according to documents in Dynamex Operations West Inc. v. Superior Court of Los Angeles County.
In a unanimous decision by seven judges, the ruling defines an independent contractor as a “worker (that) 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.” The ruling puts other requirements in place for a company to classify a worker as an independent contractor: “That the worker performs work that is outside the usual course of the hiring entity’s business” and “that 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.”
Attorneys for Dynamex could not be reached for comment.
A New Jersey bill that would establish a system of portable benefits, including workers compensation, for gig economy workers has been approved in two committees of the New Jersey General Assembly.