Legal Question in Business Law in California

Probably not...and it "depends" upon the totality of the circumstances. The best option is for you to call the local EDD and Labor Commissioner to discuss the situation.

By Grace...

Shawn Jackson ESQ. (707) 584-4529

Business Development Attorney

No communication resulting herein shall create an attorney-client relationship unless a separate retainer agreement is signed by attorney and client. The information provided neither is not legal advice nor is it conveyed in the course of an attorney-client relationship, but is intended merely as a general overview with regard to the subject matter covered. You should not act upon this information without seeking professional counsel such as any attorney in this office in a subsequent email communication (agreement) and the formation of an attorney client relationship.

EMAIL: [email protected]

www.CaliforniaBusinessDevelopmentAttorneys.com

www.CaliforniaBusinessDevelopmentCenter.com

www.CaliforniaBusinessDevelopmentPlans.com

Not likely. If you would have qualified for independent contractor status under the complex set of rules for making that determination before and they had you on payroll without being required to, then they can. If you would not have qualified before, but they change your work rules and circumstances such that you would now qualify they can. Most likely, though, what they are doing is illegal. A good summary of how the determination is made can be found on the Dept. of Industrial Relations website at: http://www.dir.ca.gov/dlse/faq_independentcontractor.htm If, after reading that, you think what they are doing does not qualify you as an independent contractor, then follow up with a complaint to the D.I.R., which can also be submitted via information on their website.

As I see it, this so-called "change" has to be a two-step process. First, the employer has to fire you as an employee. This they can probably do, as we say, "for a good reason, or for no reason at all, but not for a bad reason." At this point you become an unemployed person.

Then, you and the employer need to agree upon a contract, under which you become a contractor. This cannot happen without mutual consent. If you don't agree, you remain an unemployed person.

Several other factors remain to be mentioned. First, impermissible bad reasons for firing an employee include whistle-blowing, union activity, and various kinds of discrimination including age, sex, race and religion.

Next, just calling someone an independent contractor doesn't make them one for purposes of various governmental agencies involved in collecting employment taxes, enforcing the worker's compensation laws, and so forth. If the working conditions, etc. make it appear that you are called "independent" but really aren't, under the agency's own rules, it will consider you an employee and the employer to be in violation of its duty to withhold and pay various taxes, provide insurance, and so on. There are lists of factors, each usually anywhere from a dozen to twenty long depending on the agency, and given varying weight in determining whether Mr. X is truly an independent contractor or really an employee. Chances are, you'd still be an employee under the government tests.

The ultimate problem is that your choice may be limited to accepting the change or ending up unemployed (and/or facing a legal battle, bringing the situation to the attention of the labor commissioner).

As a Franchise Attorney I agree with the other attorneys. Most likely the employer is trying to skirt its employment tax obligations by doing this. You should contact the Labor Commissioner. Consult with a good business or franchise attorney in your area for specific advice.

Mr. Franchise - Kevin B. Murphy, B.S., M.B.A., J.D.

Franchise Foundations, a Professional Corporation