California: When is an Independent Contractor Actually an Employee?

The U.S. Department of Labor has published a worksheet that describes the factors that courts generally consider under the Fair Labor Standards Act when determining whether an employment relationship exists. These include:
1) The extent to which the work performed is an integral part of the employer’s business;
2) Whether the worker’s managerial skills affect his or her opportunity for profit and loss;
3) The relative investments in facilities and equipment by the worker and the employer;
4) The worker’s skill and initiative;
5) The permanency of the worker’s relationship with the employer;
6) The nature and degree of control by the employer.
When analyzing whether a worker is an employee or an independent contractor under California state law, the most important factor is whether the employer maintains “the right to control the manner and means of accomplishing the result desired…” S. G. Borello & Sons, Inc. v. Department of Industrial Relations (1989) 48 Cal.3d 341, 350. California courts also look to other factors to ascertain the nature of an employment relationship. The California Division of Labor Standards Enforcement (DLSE) lists and explains the weight that courts often give these factors.

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