Being injured at work can be devastating for your career and finances. California provides workers’ compensation to workers to pay for their medical treatment and fill in the gap left by lost income. Recent changes to California law and a recent court decision may also expand workers compensation coverage and other rights to many workers, known as independent contractors or gig workers, who were left out of this protection.
What workers’ compensation covers
In California, workers’ compensation is paid to workers who suffer a work-related injury from an accident or repeated exposures that cause injuries. It pays for medical care, temporary disability benefits and supplemental job displacement benefits. Death benefits may be paid to the family of a worker killed by a work-related injury.
Workers compensation and other protections typically do not cover independent contractors because they are not employees or classified as workers and they presumably work outside an employer’s direct control. In Sept. 2019, however, California passed a law which narrowed the scope of the independent contractor classification in the state.
That law contains an ABC test which evaluates the work and employer control. California workers are independent contractors only if they perform work outside of the company’s usual business. Accordingly, they are employees if the business exercises control over how they do their tasks or if their work is part of the company’s regular business.
The Internal Revenue Service also utilizes a test that contains 20 factors and evaluates whether the business controls the method, manner, and control of work. None of these factors have more weight or determine the outcome. Important elements under this test are the duration of the work relationship, professional credentials, whether there are flexible or rigid hours, who provides the work tools and supplies, and reimbursement for expenses.
There are also many other tests contained in federal and state laws. Typically, written contracts do not necessarily determine worker’s status if other facts indicate that the worker is actually an employee.
Classification of a worker as an employee or independent contractor has other consequences in addition to workers’ compensation coverage. This classification can determine federal and state tax withholding, pensions, health care, overtime requirements, paid leave, and health care and unemployment compensation coverage.
California court case
On Aug. 10, a California state judge granted a preliminary injunction. It ordered ride hailing services Uber and Lyft to treat their drivers in the state as employees.
The judge rejected Uber and Lyft’s arguments that they do not provide rides but offer technology platforms. He said that treating tech workers as employees and drivers as independent contractors was circular reasoning and ignored the role that these drivers had in these businesses.
In his ruling, the judge relied on California’s recent ABC test. The order takes effect in 10 days and was issued before the trial on the merits of this case which was filed by the state Attorney General and Los Angeles and Sam Francisco city officials.
Uber and Lyft said that it will appeal the order. California voters will also decide whether to classify these drivers as independent contractors in Nov.
An attorney can advise workers on their rights under California’s workers’ compensation law. They can help assure that their rights are protected in this changing situation.