392 | 2023 Cal-Peculiarities ©2023 Seyfarth Shaw LLP www.seyfarth.com sue for waiting-time penalties for failing to pay timely termination wages,2 sue for violation of antidiscrimination and retaliation laws, seek workers’ compensation benefits, seek unemployment compensation benefits, and have the DLSE act on their behalf to seek statutory and contractual remedies. 19.1.2 The government official who wants taxes and penalties Taxing authorities prefer that workers be characterized as employees rather than independent contractors, because employers owe payroll taxes for employees and owe no similar taxes with respect to their independent contractors (see § 1.6.2 above). 19.1.3 The tort plaintiff who wants damages Third parties injured by an organization’s independent contractor will try to re-characterize the independent contractor as an employee, to argue that the third party’s injuries were inflicted within the scope of the alleged employee’s employment, thereby triggering the organization’s liability as an employer. 19.2 Presumptions of Employment in Various Contexts Ordinarily, individuals who sue to obtain the benefits of employee status bear the burden to prove that they are actually employees. In various California contexts, however, the standard of proof shifts in favor of the person claiming employment status and suing for benefits or wages. 19.2.1 Workers’ compensation For purposes of workers’ compensation coverage, the Labor Code presumes that an individual retained to provide services for a fee is an employee, even if the individual has agreed in writing to be an independent contractor.3 19.2.2 Unemployment compensation California courts have held that, in unemployment insurance cases, public policy prefers that the organization rather than the individual shoulder the cost of social insurance.4 The law therefore requires organizations to prove independent contractor status instead of requiring individuals to prove employee status.5 19.2.3 Providing services under a license California law presumes that a worker who provides services pursuant to a business license or for a person required to have such a license is an employee.6 19.2.4 The presumption that employment exists where services are provided Historically the DLSE adopted a presumption of employment where an individual has provided services to an employer: DLSE starts with the presumption that the worker is an employee, where employment status is at issue, that is, employee or independent contractor.7 That presumption has been ratified, first by the California Supreme Court, in 2018, and then by the Legislature, effective 2020. (See § 19.6.)
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