CA Supreme Court Cracks Down On “Contractor” Designation

California ’s state supreme court has made it more difficult for employers to classify workers as contractors. It’s not only companies in the gig economy that will be affected by this decision,  because it is likely to lead many employers in California to immediately question whether they should reclassify independent contractors rather than face the potential for stiff fines for misclassification,  according to an article in the Los Angeles Times. The decision is also likely to have an affect nationally by accelerating the trend whereby states expand worker protections “in part as a counterweight to the restrictions on worker rights under federal law,” according to one plaintiff attorney, who notes that courts in Massachusetts and New Jersey have done so already. The court in the CA decision laid out what it takes to be the defining characteristics of a contract relationship, among them that the employee “has independently decided to engage in an independently established business,” rather than being simply designated an independent contractor by the hiring entity.