Time sure does fly. Here at Griswold Law (and in life), things have been quite busy. I was unpleasantly surprised to realize it has been close to a year since the last article. My motivation is renewed and the published articles will follow.
Independent contractor...employee..."getting 1099'ed"...self-employment tax...these terms and their implications, in a legal and a tax sense, are complicated. At the outset of a company/independent contractor or employer/employee relationship, a clear relationship needs to be defined. Unfortunately, many times the relationship is not made clear because neither party understands the difference between an "independent contractor" or an "employee."
California has a long history of protecting the rights of employees and employees' access to fair wages. The California Supreme Court famously stated, "it is manifest that wages due belong to the employee, and not to the employer..." The Court went on to highlight the "policy favoring full and prompt payment of wages...wages are not ordinary debts and because of the economic position of the average worker and, in particular, his dependence on wages for the necessities of life for himself and his family, it is essential to the public welfare that he receive his pay when it is due." (Kerr's Catering Service v. Department of Indus. Relations (1962) 57 Cal.2d 319, 326).
In the recent California Supreme Court case, Arias v. Superior Court S155965, __ Cal. 4th __ (2009), the Court determined that an employee suing an employer for labor law violations on behalf of himself and others seeking civil penalties under the Private Attorneys General Act ("PAGA") is not obligated to meet the requirements for class actions in California. In the same ruling, the Court did determine that an employee pursuing the same claim under the Unfair Competition Law ("UCL") would have to bring the representative claims as a class action. This ruling expands the power of lawsuits brought by employees and will likely increase liability exposure for employers across the state of California.
In California, pursuant to California Labor Code section 2802, employers are required to reimburse employees' job-related expenses incurred while performing the duties of their employment. The typical expenses relate to travel expenses, gas, vehicle maintenance and cell phone, however the expenses can encompass any expense as long as the expense was necessary to the discharge of the employee's duties. Such expenses are regularly incurred by outside salespersons traveling to see clients and potential clients.