It’s “Workplace Wednesday!” Today marks the release of our second installment of a new CalChamber podcast called “The Workplace.” Every week you can look forward to a new podcast from us that will feature expert and entertaining commentary on HR issues, legislation, politics and much more of interest to California’s employers and employees. So far, the podcast has been a hit and we’re getting a lot of positive feedback. Today’s episode is on the Dynamex decision (involving independent contractors) where CalChamber President Allan Zaremberg and I have a spirited discussion about how we got to this point with the independent contractor situation and where we go from here. We discuss the fact that, without a legislative fix, the Dynamex decision could jeopardize work opportunities and income potential for millions of independent contractors.
In Dynamex, the California Supreme Court abandoned a long-established balancing-of-factors test previously adopted by the court in a 1989 decision, S.G. Borello & Sons, Inc. v. Dept. of Industrial Relations (48 Cal.3d 341). This previous approach weighed multiple factors in their totality to account for the variety of California industries and professions, as well as diversity of California’s workers.
Under Dynamex, the court presumes that a worker is an employee unless the hiring entity establishes all three factors of a one-size-fits-all “ABC Test.” In practical terms, the Dynamex decision has the potential to jeopardize freedom of choice for individuals and push them into a traditional employment model that lacks flexibility.
As I discuss in the podcast, as things stand right now, there are huge concerns. One big problem is that our laws have not reflected the modern economy and it certainly hasn’t reflected the growing desire of individuals to have flexibility in their work. This one decision, that was dealing with a transportation wage order is now going to be applicable to independent contractors working in virtually every industry in California. During our discussion on the podcast, Allan Zaremberg adds that the Legislature has an opportunity to intervene and update California’s outdated labor laws to reflect a modern economy.
The Dynamex decision is a great lesson about how the courts must deal with the facts in front of them but also highlights the need for the Legislature to do the work of remedying unintended consequences of such a decision. The Legislature has an obligation to now consider the issue on a larger scale and consider the impact on all parties affected.
It’s easy to subscribe to The Workplace podcast. Simply visit CalChamber’s website — http://www.calchamber.com/ — or subscribe on Google Play, iTunes, PodBean, Tune In and Stitcher.
Jennifer Barrera, Executive Vice President