Is your Labor Contractor an Employee?

Date: Jul 15, 2019
By: Basi Insurance
In: ,

The California Supreme Court has issued a major decision that dramatically restricts the ability of the California employers to use independent contractors– and requires many existing independent contractors to be treated, instead, as employees.

The case is known as Dynamex Operations West, Inc v. Superior court of Los Angeles

In a nutshell, the court adopted a standard that presumes that all workers are employees instead of contractors. How does this affect business owners? It means you may need to reevaluate how you’ve classified your employees on your insurance policy – particularly workers comp.  It means re-evaluating who is and is not your employee. Classifying workers under the wrong category (or not at all ) could cost you big, if you’re not careful.

So listen up employers – ask yourself: Is the labor contractor you are using your employee? Contact your insurance company to find out if you need to add them to your policy. Should a claim occur you may or may not be covered. Under the new ruling, an employer must provide proof of all of the following items.

To qualify as an independent contractor, an employer must now prove all the following.

  1. That the worker is free from the control and direction of the hirer in the performance of the work.
  2. That the worker performs work outside the usual course of the hiring entity’s business.
  3. That the worker is customarily engaged in an independently- established trade, occupation or business of the same nature as the work being performed for the hiring entity.

For more information on the Dynamex case from April 30,2018, it’s rulings and how they may impact you, the business owner, contact us today. An agent can help you figure out if you’re covered properly at no charge. Call Basi Insurance Services, Inc. at (209) 847-3065 or toll free at (877) 590-4826.


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