Dynamex - The legal precedent from 2018 governing the use of subcontractors, which is codified in AB5
Hirer - One who hires a thing, or the labor or services of another person.
Claims for Wages and Benefits - Actions taken by an employed worker c stating their rights and the amounts due to them.
Wage Orders - Demands made by the Department of Industrial Relations upon employer entities to pay designated amounts or sums to a worker.
Industrial Welfare Commission - established to regulate wages, hours and working conditions in California. IWC wage orders must be posted by all employers in an area frequented by employees, where they may be easily read during the workday. The IWC is currently not in operation. The Division of Labor Standards Enforcement (DLSE) continues to enforce the provisions of the wage orders.
Division of Labor Standards Enforcement (DLSE) - also known as the California Labor Commissioner's Office, their aim is to ensure a just-day's pay in every workplace in the State and to promote economic justice through robust enforcement of labor laws. By combating wage theft, protecting workers from retaliation, and educating the public, the commission purports to put earned wages into workers' pockets and help level the playing field for law-abiding employers.
ABC Test - three criteria to govern whether a worker is an employee or a subcontractor; a precedent set in the 2018 Dynamex case, overruling the previous governing precedent set in the 1989 Borello case. Entities may be exempt from ABC test if certain criteria are met, however they must still comply with the Borello precedent for defining who is a subcontractor vs employee.
Unemployment Insurance - Temporary benefits paid to employees that become unemployed
Disability Insurance - Insurance benefits paid to an employee for workplace injuries
Common Law - The common law is that which derives its force and authority from the universal consent and immemorial practice of the people. It has never received the sanction of the legislature, by an express act, which is the criterion by which it is distinguished from the statute law. It has never been reduced to writing; by this expression, however, it is not meant that all those laws are at present merely oral, or communicated from former ages to the present solely by word of mouth, but that the evidence of our common law is contained in our books of Reports, and depends on the general practice and judicial adjudications of our courts. 2. The common law is derived from two sources, the common law of England, and the practice and decision of our own courts.
Codify - Setting forth a system of organization for a set of laws.
Clarify - to make plain
Usual Course - That which is in the ordinary and regular and expected course of dealings in a certain industry, profession or section of the marketplace.
Customarily - a way which follows customs or usual practices; usually.
Direction - the management or guidance of someone or something.
Control - the power to influence or direct people's behavior or the course of events.
Connection - a relationship in which a person, thing, or idea is linked or associated with something else.
Performance - the action or process of carrying out or accomplishing an action, task, or function.
Supply - make (something needed or wanted) available to someone; provide. (Borello test)
State-mandated local program - In crafting the language for new laws, the Legislature states explicitly whether or not a requirement is a “state-mandated local program,” a code phrase that imposes new or increased requirements on local agencies
The People of the State of California - refer to the electorate as represented by the legislators who were elected to act in the interest of all Californians, with such legislators often representing the interests of lobbyists from affected industries as well as union members and their representatives, frequently with conflicting constituent interests.
Entity - a company in the form of a sole-proprietorships, partnership, Limited Liability or other Corporation, that provides labor or other services to the public or private sector, vs an individual.
Dynamex - The legal precedent from 2018 governing the use of subcontractors, which is codified in AB5, specifically the ABC Rule (a worker is free from control while working in a trade business different than who hired them, which the worker independently established)
Borello - the legal precedent from 1989 governing use of subcontractors that fall outside the governing scope of AB5
Contracting Business - an entity that has their own customer base and wishes to service those clients through Employees or a Business Service Provider.
Service Provider/Business Service Provider - who your company would sub-contract with to provide services to your Customers, and/or companies that have and serve their own clientele with autonomous operations.
Employer - ?? THE Million-dollar question !!
Subcontractor - ?? The OTHER million-dollar question !!
Employee - every person in the service of an employer under any appointment or contract of hire or apprenticeship, express or implied, oral or written, whether lawfully or unlawfully employed unless the hiring entity demonstrates all the conditions of the "ABC Test"
Referral agency - a business that connects clients with service providers with clients that provide graphic design, design, photography, tutoring, event planning, minor home repair, moving, home cleaning, errands, furniture assembly, animal services, dog walking, dog grooming, web design, picture hanging, pool cleaning, and or yard cleanup.
Connects - brings together or into contact so that a real or notional link is established.
Employing Unit - also referred to as a "temporary services employer" and/or "leasing employer" that contracts with clients or customers to supply workers to perform services for the client or customer and performs these 7 specific functions to qualify as such:
(1) Negotiates with clients or customers for such matters as time, place, type of work, working conditions, quality, and prices of the services.
(2) Determines assignments or reassignments of workers, even though workers retain the right to refuse specific assignments.
(3) Retains the authority to assign or reassign a worker to other clients or customers when a worker is determined unacceptable by a specific client or customer.
(4) Assigns or reassigns the worker to perform services for a client or customer.
(5) Sets the rate of pay of the worker, whether or not through negotiation.
(6) Pays the worker from its own account or accounts.
(7) Retains the right to hire and terminate workers.
Labor Contractor - an individual or entity that supplies, either with or without a contract, a client employer with workers to perform labor within the client employer’s usual course of business.
Wages - All amounts for labor performed by employees of every description, whether the amount is fixed or ascertained by the standard of time, task, piece, commission basis, or other method of calculation. Labor Code Section 200(a) A "wage" is defined as money or other value that is received by an employee as compensation for labor or services performed. "Other value" could include room, board, clothes, and other benefits to which the employee is entitled as a part of his or her compensation.
Willful Failure to pay wages - A "willful" failure to pay wages within the meaning of Labor Code Section 203 occurs when an employer intentionally fails to pay wages to an employee when those wages are due. However, a good faith dispute that any wages are due will preclude imposition of waiting time penalties under Labor Code Section 203. Title 8, California Code of Regulations, Section 13520 The term "willful" as used in Labor Code Section 203 and as defined in civil court decisions does not necessarily imply anything blameworthy or evil intent, but rather that the person knows what he or she is doing, is a free agent, and fails to perform a required act.
Workday - "Workday" is defined in the Industrial Welfare Commission Orders and Labor Code §500 for the purpose of determining when daily overtime is due. A workday is a consecutive 24-hour period beginning at the same time each calendar day, but it may begin at any time of day. The beginning of an employee�s workday need not coincide with the beginning of that employee�s shift, and an employer may establish different workdays for different shifts. However, once a workday is established it may be changed only if the change is intended to be permanent and the change is not designed to evade overtime obligations. Daily overtime is due based on the hours worked in any given workday; and the averaging of hours over two or more workdays is not allowed.
Work Week - Any seven consecutive days, starting with the same calendar day each week beginning at any hour on any day, so long as it is fixed and regularly occurring. "Workweek" is a fixed and regularly recurring period of 168 hours, seven consecutive 24-hour periods. An employer may establish different workweeks for different employees, but once an employee's workweek is established, it remains fixed regardless of his or her working schedule. An employee's workweek may be changed only if the change is intended to be permanent and is not designed to evade the employer's overtime obligation
Many small and medium-sized businesses have opted to enlist the services of a Professional Employer Organization (PEO) to make reclassification less burdensome. TEXT US us if you'd like to learn more how a reputable PEO serving your industry can help call 1-760-413-9274. CALL US
Your PEO should be able to provide close estimates regarding the direct costs associated with classifying each person as an employee, including taxes, impact on workers’ compensation insurance, health insurance, unemployment insurance, and more factors.
