12 | 2023 Cal-Peculiarities ©2023 Seyfarth Shaw LLP www.seyfarth.com requires a notice to new hires, on a single form, regarding the name of the employer, the rates of pay, the identity of the workers’ compensation carrier, and other such basic information. (See § 9.) Covenants Not to Compete California broadly bans even narrowly drawn restraints on trade and thus complicates employers’ efforts to enforce various covenants traditionally enforceable in other states, including many (if not all) reasonable covenants not to compete, customer non-solicitation clauses, employee non-solicitation clauses, and no-rehire clauses in settlement agreements (see § 12). Workers’ Compensation California makes it unlawful, absent “business necessity,” to dismiss an employee on workers’ compensation leave, even pursuant to a policy setting a uniform maximum length for all leaves (see § 17). Independent Contractors California is generally hostile to companies that treat workers as independent contractors instead of employees. California requires defendants rather than plaintiffs to bear the burden of proof as to whether a worker is an employee or an independent contractor (see §19.2). Most significant of all, California presumes that a company hiring a worker is the worker’s employer unless the hirer can prove all three parts of an “ABC” test: (A) the worker is free from the hirer’s control and direction in performing the work, both under the contract of hire and in fact, (B) the worker performs work outside the hirer’s usual course of business, and (C) the worker has been customarily engaged in an independently established trade, occupation, or business of the same nature as the work performed. (See § 19.6.) California imposes fines of up to $25,000 for willfully misclassifying employees as independent contractors (see § 19.7).
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