Today, the Supreme Court of California made a key decision in distinguishing between independent contractors and employees that will likely be felt statewide, across numerous industries. The case involved a lawsuit filed against delivery company Dynamex Operations West, Inc. by two delivery drivers who had been classified as independent contractors, despite performing duties that had been allegedly identical to those defined for employees.
The Court decided that an independent contractor is an individual who “independently decided to engage in an independently established business,” rather than being “designated an independent contractor by the unilateral action of a hiring entity.” The decision recognized that the company classified workers that should have been designated employees as independent contractors in order to waive certain financial obligations. This practice occurs in many businesses across industries, and the decision sets an important precedent in employer-worker relations.