Questions and Answers

Q: I don’t have any employees, this Plaintiff was an independent contractor.

A: In May 2018 the “ABC Test” of independent contractor qualification superseded common law tests of the relationship. This was codified by the AB5 bill in late 2019. After these changes it has become very difficult to have the Labor Commissioner accept a relationship with a worker as one of contractor – independent contractor. Most of the time they will be defined as an employee.

Q: Why is there a claim being filed against me?

A: The most likely answer is that a former employee has discovered how favorable the labor code is toward employees.

Q: This is a false claim. How can they just make up a claim?

A: Ex-employees can and do make up false claims on a regular basis. If the claim is not found viable there is no penalty; they just do not collect on the claim. Labor code section 1174 requires that employers to maintain extensive documentation on each employee. If there is a gap in that documentation it can leave an employer vulnerable to a false claim, because that claim requires the required documentation to refute it.

Q: Why am I on the claim personally? – The Plaintiff was working for a corporation.

A: Labor code section 558.1 allows the Labor Commissioner to impose personal liability on an owner, director, officer or managing agent of the employer. This also applies to anyone who pays the worker in cash.

Q: I didn’t know I had to pay:

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