California Employment Law Update – May 2018

Belmont Minimum Wage

The City of Belmont updated its minimum wage rate official notice to reflect the city’s minimum wage increase to $12.50 (tips not included) per hour for employers who are subject to the Belmont Business License Tax, or who maintain a facility in Belmont, and have an employee who works at least two hours per week in the city.

The rate is effective July 1, 2018.

See the notice

Pasadena Minimum Wage

The City of Pasadena updated its minimum wage rate official notice to reflect the city’s minimum wage increase to $13.25 (in addition to any tips received) per hour for employers with 26 or more employees.

The rate is effective July 1, 2018.

See the notice

Independent Contractors, IWC Wage Order Claims, and the ABC Test

On April 30, 2018, the California Supreme Court filed its decision in Dynamex Operations West, Inc. v. Superior Court regarding the proper classification of workers under the California Industrial Welfare Commission’s (IWC) wage order claims. As opposed to employees, independent contractors are not covered by IWC wage orders.

In Dynamex, the court held that there is a presumption that a worker is an employee, and covered under the IWC wage orders, unless a business (hiring entity) can establish that all of the following factors of the “ABC test” are applicable:

1. The worker is free from the control and direction of the hiring entity in connection with the performance of the work, both under the contract for the performance of such work and in fact;
2. The worker performs work that is outside the usual course of the hiring entity’s business; and
3. The worker is customarily engaged in an independently established trade, occupation, or business of the same nature as the work performed.

If the business can establish that all parts (A, B, and C) of the test are met then the worker is an independent contractor for IWC wage order claim purposes. The court’s ruling in specifically applies to the analysis of the “suffer or permit to work” definition of “employ” contained in the wage orders when evaluating worker status. The court did not address which test is applicable to claims of misclassification under other California statutes, only to claims under the IWC wage orders.

The decision is effective as of April 30, 2018.

Read the decision