Dynamex Test Throws a Wrench Into Business Models Relying on Independent Contractors

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Today, our colleagues Paula Weber and Erica Turcios Yader published their client Upending the Gig Economy? California Supreme Court’s new Dynamex test may throw a wrench into business models that rely on independent contractors. Takeaways include

  • The California Supreme Court has imposed a new test for determining who is an independent contractor or employee subject to protection under the California Wage Orders;
  • The new 3-part test, which requires employers to satisfy each element of the test, will make it harder for companies to classify workers as independent contractors; and
  • Workers who do not engage in an independent business and who do not provide services outside the usual course of the hiring entity’s business will be deemed employees, even if they are free from the direction and control of the hiring entity.

Additional Source: Dynamex Operations West Inc. v. Superior Court of Los Angeles

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