Are You Being Misclassified As An Independent Contractor In California?

As a California employment attorney, I’ve spoken with many workers who are unsure whether they’re properly classified. You may receive a 1099 tax form instead of a W-2, and your employer may call you an “independent contractor,” but that doesn’t always mean the classification is legal. In California, misclassification is a serious issue that affects your wages, benefits, and legal rights, including your right to protected leaves of absence. If you’re being misclassified, you could be missing out on protections under state law, including paid sick leave, meal and rest breaks, overtime, unemployment insurance, workers’ compensation, and family or medical leave.

The California Labor Code and the Unemployment Insurance Code provide clear guidelines for who qualifies as an employee. One of the biggest shifts in recent years came with the passage of Assembly Bill 5 (AB 5), which went into effect in 2020 and codified the ABC test. This test narrowed the definition of an independent contractor and expanded worker protections under California law. If your employer still treats you as an independent contractor despite meeting the criteria of an employee, it’s time to review your rights and take legal action if necessary.

Understanding The ABC Test For Independent Contractor Classification

Under Labor Code § 2775, California now uses the ABC test to determine whether a worker is truly an independent contractor. To legally classify a worker as an independent contractor, all three of the following conditions must be met:

• (A) The worker is free from control and direction in the performance of their work;
• (B) The worker performs work that is outside the usual course of the hiring entity’s business;
• (C) The worker is customarily engaged in an independently established trade, occupation, or business of the same nature as the work performed.

If your work does not meet all three prongs of this test, you must be classified as an employee. Misclassification means your employer may be denying you access to paid family leave, overtime pay, rest breaks, and other protections under California labor laws.

Why Misclassification Matters For Leave Of Absence Rights

As an employee, you are protected by a wide range of state and federal leave laws. But if you are misclassified as an independent contractor, your employer may try to deny you these rights. Some of the most critical leave protections include:

• California Family Rights Act (CFRA) under Government Code § 12945.2, which provides up to 12 weeks of protected unpaid leave for serious health conditions, bonding with a new child, or caring for a family member.
• Paid Sick Leave under Labor Code § 246 requires employers to provide at least 24 hours or three days of paid sick leave per year.
• Pregnancy Disability Leave (PDL) under Government Code § 12945 which allows up to four months of leave for pregnancy-related conditions.

Misclassified workers may not be offered time off, and if they request it, they may face termination or retaliation. As an attorney, I can help clients determine if their classification is legal, and if not, pursue the back pay and legal remedies they are entitled to under California law.

Red Flags That Suggest You May Be Misclassified

Here are some common indicators that you may actually be an employee under California law:

• Your employer sets your hours and controls how you perform your job.
• You work exclusively for one company.
• You are required to follow company policies or wear a company uniform.
• You do not market your services to other clients or operate as a true business.
• You use the company’s tools, equipment, or facilities.
• You are penalized or disciplined for not following instructions.

These are all signs that your employer is exerting control consistent with an employee relationship. If you are performing tasks that are central to the company’s business, such as a delivery driver working for a delivery company, you likely meet the legal definition of an employee and may be misclassified if you’re labeled otherwise.

The Legal And Financial Consequences Of Misclassification

Misclassification harms workers by denying them basic rights and benefits. But it also exposes employers to significant legal liability. If you’re misclassified, you may be entitled to recover:

• Unpaid overtime wages;
• Missed meal and rest break premiums;
• Reimbursement for business expenses (under Labor Code § 2802);
• Penalties under the Private Attorneys General Act (PAGA);
• Waiting time penalties for unpaid wages (under Labor Code § 203);
• Access to state disability insurance, unemployment benefits, and paid family leave.

Employers may also face audits from the California Labor Commissioner, the Employment Development Department (EDD), or the Franchise Tax Board. These agencies can impose fines and pursue unpaid payroll taxes. As a legal advocate, I can help clients assert their rights and hold their employer accountable.

How I Help Workers Challenge Misclassification

If you believe you’ve been misclassified, I can evaluate your employment relationship and help you determine if you qualify as an employee under California law. If you do, I may be able to pursue your unpaid wages, denied benefits, and leave protections through:

• A wage claim with the California Labor Commissioner;
• A civil lawsuit for damages and statutory penalties.
• A class or representative action under PAGA, if other workers are affected.

I also represent workers who were denied leave or retaliated against for requesting protected time off. Your right to medical, family, and disability leave should not depend on a false job title. I’ll work with clients to protect those rights and pursue every available remedy.

FAQs About Independent Contractor Misclassification In California

How Do I Know If I’m Misclassified As An Independent Contractor?

The ABC test is the starting point. If your employer controls your work, assigns your schedule, or requires you to follow company rules, you’re probably misclassified. If you perform the same type of work that the company is in business to do, like delivering packages for a courier company, that’s another red flag. You don’t need to sign a contract to be considered an employee under the law; what matters is the nature of the work.

What Rights Am I Losing If I’m Misclassified?

You may be missing out on minimum wage, overtime pay, paid sick leave, workers’ compensation, unemployment insurance, and protections under CFRA, FMLA, and PDL. Misclassification can also impact your right to disability insurance or paid family leave through the California EDD. Many workers don’t realize what they’ve lost until they need these benefits and are told they don’t qualify.

Can I Sue My Employer For Misclassification?

Yes. California law allows you to file a claim for damages, back wages, and penalties if you’ve been misclassified. You can also join with other workers in a group claim under PAGA or a class action. I can help clients evaluate options and fileclaims with the Labor Commissioner or in court.

What If I Agreed To Be An Independent Contractor?

Even if you signed a contract saying you’re an independent contractor, that doesn’t make it legal. California courts look at the actual working relationship, not just the label. If the ABC test isn’t met, then you’re an employee under the law, regardless of the contract language.

What Is The Statute Of Limitations For Filing A Misclassification Claim?

You typically have three years to file a claim for unpaid wages or meal/rest break violations. If you’re pursuing penalties under the California Labor Code, you may have one year. In some cases, you may have up to four years if the claim involves an unfair business practice. The sooner a client acts, the better chance we have to preserve evidence and strengthen a client’s case.

Can I Be Fired For Challenging My Classification?

California law prohibits retaliation against employees who assert their labor rights. If you are fired or punished for complaining about your classification or for requesting protected leave, you may have a claim for wrongful termination or retaliation under the California Labor Code or Fair Employment and Housing Act (FEHA). I will help clients assert their rights and protect them from unlawful treatment.

What Should I Do If I Think I’m Misclassified?

Start by keeping records, emails, pay statements, schedules, and any communication that shows how your job is managed. Make notes about how your work is assigned and whether you’re allowed to take breaks or time off. Then call my office for a confidential review. I can walk you through your legal rights and help you decide on your next steps.

Call Law Office Of Joseph Richards, P.C. To Protect Your Employee Rights

If you believe you’re being misclassified as an independent contractor, you may be losing wages, benefits, and protections under California law. At Law Office of Joseph Richards, P.C., I’m committed to helping workers across California understand their rights and fight back against unlawful employment practices. You may not have to accept being denied family leave, sick time, or fair pay.

Contact the Orange County employment law attorney at Law Office of Joseph Richards, P.C. by calling (888) 883-6588 to receive your free consultation. We represent workers across California and are ready to help you get the compensation and legal protections you deserve.