February 24, 2021

Volume XI, Number 55

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February 22, 2021

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California Independent Contractor Classification Becomes Even More Thorny, as California Supreme Court Holds Strict ABC Test Applies Retroactively

On January 14, 2021, the California Supreme Court decided, at the request of the Ninth Circuit, that its decision in Dynamex Operations West, Inc. v. Superior Court, 4 Cal.5th 903 (2018) applies retroactively. See our California Employment Law Update for more on this significant decision.

Applying the strict “ABC test” for determining whether a worker is an employee or independent contractor retroactively adds yet another, complicating, angle to worker classification in California. In the wake of this decision, businesses that have classified their workers appropriately for federal purposes and that historically classified their workers appropriately for purposes of California state law pre-Dynamex, are left with the perplexing result of nevertheless having potential exposure to liability arising from California’s wage orders (but not, notably, the full panoply of statutes addressed by California’s much broader worker classification law known as Assembly Bill 5 (AB 5”)). In the transactional context, the California Supreme Court’s decision underscores the importance of diligence and attention to worker classification processes and practices where businesses engage independent contractors in California.

To learn more about the California Supreme Court’s decision in Dynamex,  listen to our podcast on The Proskauer Benefits Brief:  Legal Insight on Employee Benefits and Executive Compensation.

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© 2020 Proskauer Rose LLP. National Law Review, Volume XI, Number 19
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About this Author

Anthony J Oncidi, Employment Attorney, Proskauer Rose Law Firm
Partner

Anthony J. Oncidi heads the Labor & Employment Law Group in the Los Angeles office. Tony represents employers and management in all aspects of labor relations and employment law, including litigation and preventive counseling, wage and hour matters, including class actions, wrongful termination, employee discipline, Title VII and the California Fair Employment and Housing Act, executive employment contract disputes, sexual harassment training and investigations, workplace violence, drug testing and privacy issues, Sarbanes-Oxley claims and employee raiding and trade secret protection....

310-284-5690
Kate Gold Labor and Employment Lawyer Proskauer
Partner

Kate Gold is a partner in the Labor & Employment Law Department in the Los Angeles office.

Kate has over 25 years of experience representing clients in a range of industries, across all areas of employment law.  An experienced litigator, she has represented clients in all types of employment-related suits, including class and collective actions, discrimination, retaliation and harassment, non-compete and wage/hour matters.  In addition to litigating, she conducts high-level workplace investigations and routinely counsels clients on matters involving the full range of state and...

+1.310.284.5623
Colleen Hart, Proskauer Rose, Los Angeles, Tax Consequence lawyer, Corporate Governance Attorney
Partner

Colleen Hart is a partner in the Tax Department and a member of the Employee Benefits & Executive Compensation Group.

Colleen advises companies, executives and boards on complex executive compensation matters. She offers a multidisciplinary approach to compensation and benefits issues with a focus on tax planning, securities laws and corporate governance. Matters she handles include the negotiation, structuring and implementation of employment and change-in-control agreements and deferred compensation, equity and incentive compensation plans...

310.284.4519
Law Clerk

Michelle Lappen is a law clerk in the Labor & Employment Department. She earned her J.D. from Columbia Law School, where she was an articles and submissions editor for the Columbia Journal of Law & the Arts. During law school, Michelle was a teaching fellow for the Advanced Negotiation Workshop.

310-284-4564
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