Independent Contractors Versus Employees in California

The California Labor Commissioner has determined than a driver for Uber was misclassified as an independent contractor rather than as an employee.  The decision is under appeal and will not therefore immediately affect Uber's operations in California, although it could lead to more similar claims against them inside and outside of California, as well as more claims of misclassification by nominal independent contractors of other California companies.

Uber's assertion, if correct, that similar claims have been rejected in five other states highlights California's pro-employee labor laws.

The decision is a reminder that California small businesses desiring to keep or engage independent contractors need to do so only after consulting with an employment law attorney and implementing policies, procedures, and agreements that support the proper classification of the workers as "ICs" rather than "EEs".  In some circumstances, this won't be possible, and the workers will need to be hired as employees, or - if already working as independent contractors - converted to employees.