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California Supreme Court Transforms the Test for Who Is an Employee

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Re: California Supreme Court Transforms the Test for Who Is an Employee

#161
post #53

Earlier quoted context omitted.

Appeal to whom? This ruling/guidance was provided by the California Supreme Court about how independent contractors are classified by the state.

Yeah exactly. This is a question of state law and the Cal SC is the final word on what state law means. The only exception is if the USSC agrees that the state law violates some provision of the US Constitution and that’s extremely rare. Not going to happen.

Still, that would be a case about federal law (the Constitution).

Re: California Supreme Court Transforms the Test for Who Is an Employee

#162

Why does a court get to establish a rule like this? Shouldn’t this be a legislative responsibility?

Yes, I guess so. Thing is, that legislation is often slow, so courts have to decide matters. In Germany also the legislation oftentimes is not competent. Many laws are made, that are without value, after they where on trial. So, at least in Germany, courts are oftentimes a second law maker, because they have to check, how all these rules fit together (in the best of all worlds, the legislation should do that beforeha…

It's worth pointing out there are different legal foundations. The United States is on something called Common Law [1], in which courts are generally supposed to follow precedent and not make up new stuff or function as de facto legislatures. Obviously, this is one of those plans that doesn't necessarily survive contact with the enemy, but under common law it is reasonable to criticize the court here as potentially overreaching. A mitigating factor in that criticism is precisely that many other peer jurisdictions have adopted the same standard on presumably similar bases of legislation, so there is some precedent in favor of using this same standard.

Germany is built on a foundation called Civil Law [2]. In this system, judges are encouraged to uphold principles and rule on the specifics of a case, regardless of previous cases that may have found in some way or another. Just as with common law, I'm sure judges may consult precedents as they find useful, but they aren't bound to them, and are, I presume, much less likely to mention them in judgments as they are not anywhere near as relevant.

This also applies in a fairly obvious fashion to Hermel's post that is a sibling to what I'm replying to. In Civil Law, which Switzerland also operates under [3], instructing judges to imagine reasonable laws is a reasonable thing to do. In Common Law, judges just imagining laws to be the way they believe they should be strikes at the foundation of the system.

(Perhaps ironically, it's probably easier for Common Law courts to function as de facto legislatures precisely because of the respect for precedential law, despite the fact they are nominally not supposed to. A certain court can make a decision and apply some test like this, and it tends to spread around the country unless some legislatures take explicit action to prevent it. It can even spread between countries, because common law courts can look at other country's common law courts and consider their precedents as well, though more weakly than their own. By contrast, while a civil law judge at first seems to be taking a legislative role when they make some decision based on laws that essentially only exist in their head, they are binding the future far less and the decision carries less global weight, making it much harder to truly "legislate from the bench" in the way we complain about in the US. Second order effects can be pretty twisted!)

[1]: https://en.wikipedia.org/wiki/Common_law

[2]: https://en.wikipedia.org/wiki/Civil_law

[3]: https://en.wikipedia.org/wiki/Civil_law_(legal_system)#/medi...

Re: California Supreme Court Transforms the Test for Who Is an Employee

#164

This test has been the standard in other states for a while - New Jersey for example. But I don't think it has been an issue for Uber/Lyft classifying drivers in NJ as contractors. I wonder why not?

California has 4x the population of Jersey and is home to the very businesses that are leading the charge against employee/contractor norms.

Re: California Supreme Court Transforms the Test for Who Is an Employee

#165

Earlier quoted context omitted.

So a 1099 developer who is required to participate in daily standups will likely qualify as an employee I presume?

A collegue in the UK was forced^Wencouraged to start a limited and contract for his former employer. As far as I can tell that was purely a scheme to shift liabilities and to pay less taxes.

There is a big case in the UK about the BBC forcing the "talent" to set up self employed companies - the tax man didn't like this and is fining people hundreds of thousands of pounds.

Though as presenters they have a better chance of beating ir35 as they can legitimetly work out side of the BBC in a way that a developer cant - eg pa's at events etc

Re: California Supreme Court Transforms the Test for Who Is an Employee

#166

Here is the new test (the ABC test if you're into unnecessary pet names for things): > If A, B, or C isn’t present, the worker is considered an employee. > A. Freedom from control over how to perform the service > B. Service is outside the business' normal variety or workplace > C. Worker is engaged in independently established role So if any one of those conditions isn't the case, you are an employee under the law.…

I think that B is going to be very difficult, if not impossible, for Uber/Lyft to overcome. The act of driving is the core business operation for ride-sharing companies; it’s the fundamental means by which they create value. I can’t see a good argument for how that could possibly fall outside of their “normal variety”.

Re: California Supreme Court Transforms the Test for Who Is an Employee

#167
post #52

Earlier quoted context omitted.

> A person with outside perspective, rare skills, experience, and most importantly, is the outside voice able to bring real options to the table along with production proven, time tested ways and means, is worth every penny. Such a contractor would likely meet the new "ABC" standard in the linked article, though. Those aren't the positions that are in danger of being eliminated, it's the "grunt contractor" folks who…

My thoughts exactly. Some people seem to be reading this ruling as though no "tech company" could hire any "tech contractor". However, I read it: if a hypothetical company doesn't for example design databases as their bread and butter they could hire someone else to.

In the UK contractors tend to get hired as temporary stop gaps at a much higher rate than perms (like double).

Either to cover a need for a project that won't last long term or to fill the demand for more fingers on keyboards right now.

Is that not how the US uses them? Then again UK programmers seem to earn much less than US programmers. Outside London it's like £50k for a senior dev ($70k?).

Re: California Supreme Court Transforms the Test for Who Is an Employee

#168

Here is the new test (the ABC test if you're into unnecessary pet names for things): > If A, B, or C isn’t present, the worker is considered an employee. > A. Freedom from control over how to perform the service > B. Service is outside the business' normal variety or workplace > C. Worker is engaged in independently established role So if any one of those conditions isn't the case, you are an employee under the law.…

I think that B is going to be very difficult, if not impossible, for Uber/Lyft to overcome. The act of driving is the core business operation for ride-sharing companies; it’s the fundamental means by which they create value. I can’t see a good argument for how that could possibly fall outside of their “normal variety”.

They could potentially argue that their core business is creating a marketplace where riders can find drivers and not the driving itself. That would classify the office workers as employees and the drivers as contractors.

Re: California Supreme Court Transforms the Test for Who Is an Employee

#170
post #47

Earlier quoted context omitted.

So if any one of those conditions isn't the case, you are an employee under the law. I see people in this thread wondering how it'll affect companies like Uber/Lyft/whatever 'B' is downright apocalyptic for contract developers in all sorts of roles. Sounds like massive judicial overreach to me. If your summary is accurate, I wouldn't expect that particular guideline to survive appeal.

If you are an IT company and all your work is done through contract developers, perhaps you _are_ going against the spirit of the law. Labor law is meant to protect those in the employer employee relationship, and most contractual work explicitly weaken this relationship a lot. So contractual work really shouldn't be the norm in a business. If you can't provide your main business without this set of people, then thos…

Well if in the UK I can get 3x my FTE rate as contractor its definitely in my interest.

Also some type of lawyers are self employed if it's ok for a Barrister why not me.

The problem is when you get mcjob companies who abuse minimum wage staff - its well paid individual contractors that get hit.

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