Posted on April 30th, 2020
Recently, a new law was passed limiting contracted workers in CA. Read this article learn about this law as well as the distinction of contractors vs employees.
Do you run a business in California and worry about how to classify your workers? Are you concerned you aren’t following the law because it’s so hard to understand?
Things aren’t looking very golden for business owners in the Golden state these days. With the new labor laws in California that went into effect at the beginning of 2020, employers are having a hard time knowing if they’re on the right side of the law.
If you have employees in California, then you need to pay close attention to these new labor laws.
If this describes you then, read on, this article will show you how to differentiate contractors vs employees as well as how the new labor laws affect your business.
Independent Contractors vs Employees
An easy way to determine whether or not someone is an independent contractor is whether or not they have independent control over their schedule, their work location, and how they complete the work.
If you hire someone to come into your office and run your digital marketing campaign, they are an employee. They need to come to work at designated times and follow your standard protocols for employee conduct and work practices.
However, if you hire a digital marketing specialist to work from home and complete your marketing remotely, this is generally considered an independent contractor. They work at any time they choose to work, from any location and using whatever standard protocols they want. As long as the job is done, they have control over how and when it’s done.
The IRS differentiates employees from independent contractors as those people under your employ for whom you don’t withhold taxes, unemployment insurance, or social security payments.
Historically, independent contractors have been required to set aside their payments for their income tax as quarterly tax payments. However, the other benefits were not available to contract workers. Now, some contractors are fighting to gain access to benefits such as paid time off and unemployment compensation.
Recently, a new law in California is making it harder to establish oneself as an independent contractor in California. The law has severely restricted who qualifies to be a contractor, thus forcing all businesses to hire all their workers as benefited employees.
I’ve been where you are. I have owned several businesses as a serial entrepreneur before I became a lawyer. Now I specialize in helping business owners in California to protect your rights. You’ve worked hard to build a successful business. Now, it’s my job to protect everything you’ve built and the money you’ve earned.
California New Labor Laws
Recently, in California Governor Newsom signed into law new labor practices that some complain discriminate against independent contractors. In the age of the gig economy, these new rules seem to limit their practice.
On its face, the new laws looked like they were meant to protect workers. But, unfortunately, some gig economy based apps, such as GrubHub and Uber are complaining that it unfairly discriminates against their entire business model.
You might not run a gig-based app, but these new laws still affect you and your business. It’s important as a business owner to ensure that your company ensures its hiring practices are compliant with these new laws.
The premise behind the law is to protect workers who previously did the same job as those hired on full-time, but without the benefits. From paid time off to unemployment insurance and social security contributions, these are benefits that many Americans go without.
Unfortunately, some businesses won’t be able to stay in business if they are forced to provide these benefits for everyone who does a job for them. This is usually where independent contractors have historically come into play in a business.
However, in today’s gig economy, more and more people are taking contractor jobs over traditional full-time jobs. Some people choose this lifestyle and agree to forgo the benefits in exchange for more control over their work life. While other employees felt they were being excluded from benefits due to them as full-time employees.
Knowing the difference, and where you stand with the status of your employees is imperative as a business owner. If you have questions, you will want to speak with a professional who knows about California law specifically.
Make Sure Your Business Survives and Thrives in 2020
The laws are changing and you must change your business to comply. Without the proper information, you run the risk of inadvertently breaking the law. Don’t let everything you’ve worked hard for over the years come crumbling down.
While the laws were created to protect your workers, you need to make you’re protected also. Knowing the difference between independent contractors vs employees is the first step to staying compliant.
Knowledge is power, and without it, you risk the future of your business. You need someone on your side to protect you. The fact of the matter is that the law sides with your employees.
While it’s important for somebody to watch out for the little guy, its also important for somebody to watch out for you. This is where I come into the picture.
I offer free 15 minute consultations so we can meet and talk over the phone to see if my services will help your business.
Contact me today so we can make sure your business not only survives but thrives in this new business environment in 2020.
