We previously wrote about the federal Department of Labor’s perspective on classifying employees and independent contractors here. However, many California employers are subject to the snare of multiple frameworks, all at the same time, and must also know how California law views such classifications.

For example, the California Employment Development Department (EDD) has its own distinct self-diagnosis worksheet for business owners to determine whether a worker is most likely an employee or an independent contractor. The EDD’s worksheet consists of a series of “yes” or “no” questions, such as:

• Do you instruct or supervise the person while he or she is working?
• Can the worker quit or be discharged (fired) at any time?
• Is the work being performed part of your regular business?
• Is the worker free to make business decisions which affect his or her ability to profit from the work?
• Is the worker paid a fixed salary, an hourly wage, or based on a piece rate basis?

The underlying test the EDD applies through these and other questions is the “control test.” In other words, if the principal has the right to direct and control the manner and means by which the work is performed, the worker will be an employee even if the principal never actually exercises the control. If the principal does not have such rights, the worker will generally be an independent contractor. With that framework in mind, the number of “yes” and “no” answers is meant to steer a business owner toward either the “employee” or “independent contractor” category.

However, a self-diagnosis is as reliable as the diagnostician. Are you comfortable relying on your self-diagnosis during an EDD audit? If not, you should consult with an experienced employment attorney.