If you own a business that requires specialized workers, there can be many benefits that come with hiring independent contractors. However, there can also be certain legal risks involved. Not only is it important to avoid inadvertent misclassification, but it’s important to have a solid independent contractor agreement in place that outlines the scope of work and defines the relationship. At White and Bright, LLP, our attorneys provide reliable representation to business owners and independent contractors for drafting, negotiating, and litigating independent contractor agreements.
Many businesses use independent contractors to reduce costs, have greater flexibility, and meet market demands. Specifically, an independent contractor is distinct from an employee in that they are in business for themselves — they provide specialized services to other businesses on a contract basis. In contrast, an employee is subject to an employer’s supervision and performs tasks that are essential to the business.
California law applies the “ABC” test to distinguish independent contractors from employees. Under this test, an individual must be classified as an employee unless they meet specific criteria. To be labeled an independent contractor, the worker must:
The legal team at White and Bright are well-versed in handling a wide array of issues concerning independent contractors. We provide counsel to business owners and workers to help ensure they understand their rights and assist them with any legal issues that may arise. When clients work with White and Bright, they can be confident in knowing they have a diligent attorney on their side who is well-versed in California employment law and can safeguard their interests in the event a dispute occurs.
A well-drafted and enforceable independent contractor agreement is essential to help ensure there are no disagreements regarding a worker’s classification or each party’s obligations. They can also manage expectations, clarify the obligations of the parties and reduce the risk of misclassification lawsuits. However, an independent contractor agreement must be skillfully drafted, effectively negotiated, and compliant with the law.
There are many critical considerations when it comes to drafting an independent contractor agreement. It should include clear provisions that outline the nature of the work to be performed, payment, and the manner in which the work will be conducted. The contract should also specifically state that there is no employer-employee relationship, limit the independent contractor from engaging in work that could be a conflict of interest, and state the terms for termination.
At White and Bright, our attorneys are adept at drafting independent contractor agreements that will include the necessary terms and provisions to help avoid any potential problems that could arise. We work closely with our clients to review the independent contractor agreement before it is executed and help ensure they understand the details to which they’re agreeing. If the terms of the contract do not adequately protect our client, we will work to negotiate more favorable conditions. Providing knowledgeable counsel and reliable representation, our legal team is committed to safeguarding our clients’ best interests.
While an independent contractor agreement can help to establish the intent of both parties — and define the terms and conditions of the working relationship — instances of misclassification can still arise. Notably, even if an independent contractor agreement has been signed and put into place, this does not always avoid a misclassification dispute. In the event a worker satisfies the legal criteria to be classified as an employee, California law would apply, regardless of the terms in the independent contractor agreement.
Willful misclassification can result in severe civil penalties for an employer and have financial implications that significantly impact their bottom line. In addition, an employee who is misclassified as an independent contractor can incur substantial economic losses and may be entitled to monetary damages. The attorneys at White and Bright offer diligent representation to both employers and workers for misclassification lawsuits. Whether your case can be resolved through vigorous negotiations or it requires litigation in the courtroom to reach a positive outcome, our legal team is proficient in handling even the most complex employee misclassification matters.
The laws surrounding independent contractors are highly nuanced and it’s best to have an experienced attorney by your side who can help you navigate them. At White & Bright, LLP, our employment law attorneys are dedicated to assisting employers and independent contractors with handling the legal challenges that can arise in these relationships. Located in Escondido, we offer representation to clients throughout the state of California. We welcome you to contact or call us at (760) 747-3200 to learn more about our employment law practice.