Court Applied Wrong Test When It Decided Worker Was Contractor


By Joanne Deschenaux February 1, 2019
Court Applied Wrong Test When It Decided Worker Was Contractor

A trial court erred in dismissing a caregiver's lawsuit against a placement agency for unpaid overtime wages, a California appeals court ruled. The trial court applied the wrong test in determining if the worker was an independent contractor—who would not be eligible for overtime—or an employee.

In 2011, the worker signed a contract with a caregiver placement agency, and the contract referred to the worker as an independent contractor.

The agency bills the clients an hourly rate and pays the caregivers from the money received from the clients, keeping a portion of the payment as its fee. The caregivers are free to reject any caregiving opportunity offered and to contract with other agencies for domestic work. The agency does not provide caregivers with training, tools or supplies and does not supervise the caregivers.

[SHRM members-only toolkitComplying with California Wage Payment and Hours of Work Laws]

Effective Jan. 1, 2014, the California Legislature enacted the Domestic Worker Bill of Rights (DWBR), which provides that certain workers, including caregivers, "shall not be employed more than nine hours in any workday or more than 45 hours in any workweek unless the employee receives one and one-half times the employee's regular rate of pay for all hours worked over nine hours in any workday and for all hours worked more than 45 hours in the workweek." After the enactment of the DWBR, the agency did not pay the worker overtime wages.

Workers' Compensation Standard

In December 2015, the worker sued the agency for unpaid overtime wages. The trial court dismissed the lawsuit before trial. It applied the standard courts use to distinguish between employees and independent contractors in workers' compensation cases and concluded that the worker was an independent contractor under that test. The worker appealed.  

The appellate court reversed, ruling that the court should have applied the standard set forth in the DWBR.

The court also should not use the standard applicable to overtime cases arising under the state's wage orders, the appellate court noted.

The DWBR expressly includes caregivers and personal attendants within its definition of "domestic work employees." It defines an employer as a person who "exercises control over the wages, hours or working conditions" of a worker.

The court concluded that a juror could reasonably find that under these definitions set forth in the DWBR, the worker was an employee entitled to overtime wages. The worker could therefore go forward with her claim against the agency.

Duffey v. Tender Heart Home Care Agency LLC, Calif. Ct. App., No. A152535 (Jan. 11, 2019).

Professional Pointer: Determining whether a worker is an employee or independent contractor is complicated in California. There is no single test to determine an employee's status. Instead, the applicable test may be determined by the relief the worker is seeking (such as unpaid overtime wages or workers' compensation) and the law under which the worker is proceeding (such as the state wage orders or the DWBR).

Joanne Deschenaux, J.D., is a freelance writer in Annapolis, Md.                 


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