Independent Contractors: California
Federal law and guidance on this subject should be reviewed together with this section.
- California generally applies common law principles in determining whether a worker is an employee or an independent contractor. However, as in most states, different independent contractor tests are used for different purposes. For example, in a wage claim where employment status is at issue, the California Division of Labor Standards Enforcement will often use the multi-factor economic realities test, whereas other California state agencies might apply the control test. See Determining Whether a Worker Is an Employee or an Independent Contractor.
- Businesses that hire independent contractors must file certain reports and avoid workplace harassment. See Hiring and Managing Independent Contractors.
- Employers that misclassify employees as independent contractors in California may be liable for income tax withholdings, unpaid wages and wage-related penalties, state disability and unemployment insurance contributions, workers' compensation insurance premiums, liability to employees and third parties for workplace injuries, as well as other civil penalties and fines. See Consequences of Misclassification.