Court Finds Dynamex Ruling Applies Retroactively in California Employment Case

Recently, the California Supreme Court decided that its ruling in Dynamex Operations West, Inc. v. Superior Court applies retroactively. The Dynamex case set a new legal standard for determining a California worker’s employee classification. Before the decision, businesses relied on a judicial “right to control” test for classifying workers under California’s Wage Orders. California Wage Orders regulate worker rest breaks, meal periods, and overtime. In line with several other states, the court replaced the “right to control” test, with the stringent “ABC” test.

Under the new legal standard, California wage orders carry a presumption that any worker performing work for a business is an employee. As such, the law entitles these employees to the protection set forth by California Wage Orders. A hiring entity can only overcome the presumption if they can prove three elements:

• That the worker is free from the control and direction of the hiring entity, related to the worker’s performance and in connection with the parties’ contract;
• The worker is engaged in work outside the hiring entity’s usual course of business; and
• The worker is routinely engaged in an independently established trade, occupation or business, of the same nature as the work performed for the hirer.

This landmark decision is a win for workers, who are routinely incorrectly classified as independent employees. Mis-classified workers may face many issues related to labor standards, benefits, social safety nets, health and safety concerns, and tax implications. However, workers must understand that there are certain legislative exemptions to the ruling. Some exemptions to the test apply to workers in the music industry, performing artists, freelance writers, and certain insurance industry workers.

Further, in Vasquez v. Jan-Pro Franchising International, Inc., the court held that the Dynamex ruling should be applied retroactively. In that case, the defendant argued that the issue concerned an employment relationship before the Dynamex decision; therefore, the prior “right to control” test should be applied. The court reasoned that the Dynamex decision was an “authoritative judicial decision interpreting legislative measure”; therefore, the decision will apply retroactively to all nonfinal cases that predate the decision. Workers must understand that despite the ruling, they must file their cases expediently to meet the statute of limitations.

Contact a California Employment Law Attorney

If you face discrimination or other unfair employment practices by your employer, you should contact The Nourmand Law Firm. The attorneys at our law firm have extensive experience successfully advocating on behalf of individuals facing California employment law issues, including discrimination, wrongful termination, sexual harassment, wage-and-hour disputes, and mis-classification. Our dedicated attorneys are up-to-date on all relevant statutory and case law changes that alter the landscape of employment law in the state. We understand the devastating financial and emotional toll that employment discrimination and unfair labor practices can have on a worker. As such, we work to ensure that employers are held responsible for their illegal practices. Contact our office at 310-553-3600 to schedule a free initial consultation with a California employment attorney. You can also reach us through our online form.