Currently, the California Corporations Code does not define the term “independent contractor”.  A bill introduced last month by Assembly Member Chris Norby would change this.  AB 2373 proposes to add a new Section 22 to the Corporations Code to define an “independent contractor” as having the same meaning as in Section 30 of the Labor Code.   Because there currently is no Section 30 in the Labor Code, AB 2373 adds one which defines an “independent contractor” as “a person who renders service for a specified recompense for a specified result, under the control of his or her principal as to the result of his or her work only and not as to the means by which such result is accomplished.”  The statute then lists 17 different factors to be considered in determining whether a person is an independent contractor.  In an apparent attempt to make the definition of “independent contractor” uniform across codes, the bill would add a similar definition to the Financial Code and numerous other codes. 

Currently, Section 3353 defines the term for purposes of the division governing workers’ compensation and insurance as “any person who renders service for a specified recompense for a specified result, under the control of his principal as to the result of his work only and not as to the means by which such result is accomplished.”  AB 2373 would eliminate this definition.

As far as the Corporations Code is concerned, the addition of a definition is unlikely to have much of an impact.  I was able to identify only three sections in which the term is used.  These are: Section 5227(b) (defining “interested persons” for purpose of the Nonprofit Public Benefit Corporation Law); Section 15903.03(b) (specifying when a limited partner does not participate in control of a business); and Section 16202 (governing the formation of a partnership).

Tagged in Legislation