Employment Law Blog

Starting in January 2021, there will be some new employment legislation going into effect. Here’s a little breakdown of some key things to know, as an employee.

Under the “ABC Test” established by the California Supreme Court in Dynamex Operations West, Inc. v. The Superior Court of Los Angeles County, a worker is an employee if any of the following conditions are met:

California law defines a “personal attendant” as “any person employed by a private householder . . . in the health care industry to work in a private household, to supervise, feed, or dress a child, or a person who by reason of advanced age, physical disability, or mental deficiency needs supervision. The status of personal attendant shall apply when no significant amount of work other than the foregoing is required. For purposes of this subdivision, “no significant amount of work” means work other than the foregoing did not exceed 20 percent of the total weekly hours worked.” (Labor Code § 1451(d).)

The test for whether a worker is an independent contractor or an employee is whether the employer has the right to control the manner and means of the worker’s performance.  S. G. Borello & Sons, Inc. v. Department of Industrial Relations (1989) 48 Cal.3d 341, 349–351.  A number of different factors contribute to the extent of control that an employer exercises over its workers: (1) the right to discharge at will, without cause; (2) whether the principal or the worker supplies the instrumentalities, tools, and the place of work for the person doing the work; (3) the length of time for which the services are to be performed; (4) the method of payment, whether by the time or by the job; (5) whether the one performing services is engaged in a distinct occupation or business; and (6) whether or not the work is part of the regular business of the principal.  Id.

California Labor Code section 226.7 prohibits employers from requiring its employees to work during any rest period mandated by the Industrial Welfare Commission (“IWC”) Wage Orders. “[I]n light of the remedial nature of the legislative enactments authorizing the regulation of wages, hours and working conditions for the protection and benefit of employees, the statutory provisions are to be liberally construed with an eye to promoting such protection.” Industrial Welfare Com. v. Superior Court (1980) 27 Cal.3d 690, 702. “[T]he IWC’s wage orders are entitled to ‘extraordinary deference, both in upholding their validity and in enforcing their specific terms.’” Brinker Restaurant Corp. v. Superior Court (2012) 53 Cal.4th 1004, 1027 (quoting Martinez v. Combs (2010) 49 Cal.4th 35, 61). Rest break requirements “have long been viewed as part of the remedial worker protection framework.” Murphy v. Kenneth Cole Productions, Inc. (2007) 40 Cal.4th 1094, 1105.

Under the Fair Labor Standards Act (“FLSA”), individuals may bring suit “on behalf of himself or themselves and other employees similarly situated.” 29 U.S.C. §216(b). Neither the statute itself nor the Ninth Circuit have defined the term “similarly situated,” Luque v. AT&T Corp., 2010 WL 4807088 (N.D.Cal. Nov. 19, 2010) at *3, citing Lewis v. Wells Fargo & Co., 669 F.Supp.2d 1124, 1127 (N.D.Cal. 2009). Courts in the Ninth Circuit take a two-step approach to determine whether plaintiffs are “similarly situated.” Id.

The Court’s first step is to make an initial, conditional determination of whether the plaintiffs are similarly situated, “deciding whether a collective action should be certified for the purpose of sending notice to potential class members.” Luque, supra, at *3, quoting Lewis, supra, at 1127. The initial notice stage determination utilizes a lenient standard that typically results in certification. Wynn v. National Broad Co., Inc., 234 F.Supp.2d 1067, 1082 (C.D.Cal. 2002). While the initial inquiry is not a mere formality, plaintiffs seeking conditional certification need only provide “substantial allegations, supported by declarations or discovery.” Luque, supra, at *3, citing Kress v. PriceWaterhouseCoopers, LLP, 263 F.R.D. 623, 627 (E.D.Cal. 2009). Indeed, “Courts need not even consider evidence provided by defendants at this stage.” Luque, supra, at *3 (emphasis in original), quoting Kress, supra, at 628.

“The California Supreme Court has developed a multi-factor test for determining employment status.” Ruiz v. Affinity Logistics Corp. (9th Cir. 2011) 667 F.3d 1318, 1324, quoting S.G. Borello & Sons, Inc. v. Dept. of Indust. Rel. (1989) 48 Cal.3d 341 (“Borello”).  “[U]nder California law, once a plaintiff comes forward with evidence that he provided services for an employer, the employee has established a prima facie case that the relationship was one of employer/employee.” Narayan v. EGL, Inc. (9th Cir. 2010) 616 F.3d 895, 900, citing Robinson v. George, (1940) 16 Cal.2d 238, 243-244. “Once the employee establishes a prima facie case, the burden shifts to the employer, which may prove, if it can, that the presumed employee was an independent contractor.” Id. (citation omitted).
Under California law, primary test of an employment relationship is whether “the person to whom service is rendered has the right to control the manner and means of accomplishing the result desired….” Borello, supra, at 350. While the right to control work details is the most important factor, there are also “’secondary’ indicia of the nature of a service arrangement.” Id. These secondary factors, principally derived from the Rest.2d Agency, include