Last year, the California Supreme Court issued a ruling against a trucking company that had misclassified its workers as independent contractors. In response, the California legislature is considering a bill that codifies those changes and law. Andy Crouppen is here to help explain what all that means.
First, Andy explains the difference between an employee and an independent contractor. He says that an employee is traditionally defined as someone who the company sets their hours and provides all the equipment, pays the payroll taxes, social security taxes etc. An independent contractor generally is someone who has a specialty and is hired contractually for a finite period of time. Independent contractors also cover their own taxes, pay their own payroll taxes, supply their own equipment, set their hours etc.
So, while an employee and an independent contractor might be doing the same jobs, it can be very different economically for both the company and employee or the independent contractor.
It is important to know the difference between these two classifications as there can be a competitive advantage. A company with all independent contractor will have artificially low costs because of the things they do not have to provide to those workers.
Andy goes on to say that California is often the leader in these kinds of regulations and distinctions, so the rest of the country can look to California and heed their example in the coming years.
If you need legal advice, give the experts at Brown & Crouppen a call at 314-222-2222 or visit their website. You can also check out their YouTube channel for some laughs.