Legal Question in Employment Law in California

An employer is taking a great risk at re-classifying an employee as an independent contractor. Many employers who do this to avoid paying payroll taxes end up facing stiff penalties upon an audit by the state. If all they are doing is changing your classification but you are performing the same work under their supervision, you are still an employee under the law. You could discuss the wisdom of this decision with your employer, or contact the audit department of the Employment Development Dept.

You are an 'at will' employee that can be fired any time for any reason, and your pay and benefits can be decreased any time, just not retroactively. Making you an 'independent contractor' is probably not in your best interests, as you will ultimately be disallowed your claims by IRS and CA. When brought to light, you and the employer both will likely face collection of unpaid contributions and taxes, penalties, interest, etc.