Hot Topics - Staying in Compliance

The Lean Startup by Eric Ries

I think every aspiring entrepreneur should read The Lean Startup by Eric Ries. It helps you get familiar with the problems new ventures may come across and how to come up with viable solutions. The book will also tell you how you can perfect your products or services through testing and continuous improvements so you can become a viable solution in your respective niche. This not only helps new ventures but also existing businesses like mine explore new ways to improve and grow in a respective industry. Moreover, by reading this book, you'll learn about managing your resources and catering to customer feedback. Overall, it’s an excellent read for every entrepreneur out there who is looking to build a successful business…read more

The most common misconceptions associated with the employment relationship under the FLSA relate to:

Independent Contractors

Trainees

Volunteers

Click on any of the categories above to find out more.

Independent Contractor vs Employee

AB 5 became law on January 1, 2020 and addresses whether workers are employees or independent contractors for purposes of certain rights and benefits under state law.

For inquires: click here

California's "ABC Test"

Under the ABC test, a worker is considered an employee and not an independent contractor, unless the hiring entity satisfies all three of the following conditions:

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 the work and in fact;

The worker performs work that is outside the usual course of the hiring entity’s business; and

The worker is customarily engaged in an independently established trade, occupation, or business of the same nature as that involved in the work performed.

Summary of the California Supreme Court’s explanation of how to apply the ABC test.

Part A: Is the worker free from the control and direction of the hiring entity in the performance of the work, both under the contract for the performance of the work and in fact?

In analyzing Prong A of the ABC test, the California Supreme Court in Dynamex explained:

A worker who is subject, either as a matter of contractual right or in actual practice, to the type and degree of control a business typically exercises over employees would be considered an employee.

Depending on the nature of the work and overall arrangement between the parties, a business need not control the precise manner or details of the work in order to be found to have maintained the necessary control that an employer ordinarily possesses over its employees.

The California Supreme Court in Dynamex provided the following examples of Prong A being applied:

An employer failed to establish that work-at-home knitters and sewers who made the clothing were sufficiently free from the company’s control where the employer provided the workers with the same patterns. The court reasoned that “[t]he degree of control and direction over the production (…) is no different when the sweater is knitted at home at midnight than if it were produced between nine and five in a factory.” (Fleece on Earth v. Dep’t of Emple. & Training (Vt. 2007) 181 Vt. 458, 923 A.2d 594.)

A construction company proved that a worker who specialized in historic reconstruction was sufficiently free of the company’s control where the worker set his own schedule, worked without supervision, purchased all materials using his own business credit card, and had declined an offer of employment proffered by the company (Great N. Constr., Inc. v. Dept. of Lab)

CLICK FOR MORE EXPLANATION ON GOVT. EMPLOYMENT STATUS