There is three layers: Client A pays vendor B, Vendor B Pays Sub Vendor C and Sub vendor C Pays me in 1099. I don't have any agreement with Client A nor Vendor B. I work 40 hours per week for the past 6 months at the client A office. Never worked from home and it is not allowed. I reach the office at 9 am and leave at 5PM. I have never worked for any other client except client A. The sub vendor C Pays me in 1099 to not pay his part of his taxes. He pays me no benefits and pays me 45 days late. For Jan 1st, I would get paid on March 1st. Is the subvendor C misclassifying me as a contractor instead of an employee. Will I be able to sue him. Please advice.
One would actually need a whole lot more information in order to ascertain whether you are an independent contractor or an employee (and if an employee, an employee of A, B, or C).
The fact that you were issued a 1099 form rather than a W-2 form is not determinative with respect to independent contractor status. (Toyota Motor Sales v. Superior Court (1990) 220 Cal.App.3d 864, 877)
There is no set definition of the term "independent contractor" and as such, one must look to the interpretations of the courts and enforcement agencies to decide if in a particular situation a worker is an employee or independent contractor.
When employment status is an issue (i.e. employee or independent contractor), The Department of Labor Standards Enforcement (DLSE) starts with the presumption that the worker is an employee. (California Labor Code Section 3357.) This is a rebuttable presumption. The actual determination of whether a worker is an employee or independent contractor depends upon a number of factors, all of which must be considered, and none of which is controlling by itself. Consequently, it is necessary to closely examine the facts of each service relationship and then apply the law to those facts.
For most matters before the Division of Labor Standards Enforcement (DLSE), depending on the remedial nature of the legislation at issue, this means applying the "multi-factor" or the "economic realities" test adopted by the California Supreme Court in the case of S. G. Borello & Sons, Inc. v. Dept. of Industrial Relations (1989) 48 Cal.3d 341.
In applying the economic realities test, the most significant factor to be considered is whether the person to whom service is rendered (the employer or principal) has control or the right to control the worker both as to the work done and the manner and means in which it is performed. Additional factors that may be considered depending on the issue involved are:
1. Whether the person performing services is engaged in an occupation or business distinct from that of the principal;
2. Whether or not the work is a part of the regular business of the principal or alleged employer;
3. Whether the principal or the worker supplies the instrumentalities, tools, and the place for the person doing the work;
4. The alleged employee’s investment in the equipment or materials required by his or her task or his or her employment of helpers;
5. Whether the service rendered requires a special skill;
6. The kind of occupation, with reference to whether, in the locality, the work is usually done under the direction of the principal or by a specialist without supervision;
7. The alleged employee’s opportunity for profit or loss depending on his or her managerial skill;
8. The length of time for which the services are to be performed;
9. The degree of permanence of the working relationship;
10. The method of payment, whether by time or by the job; and
11. Whether or not the parties believe they are creating an employer-employee relationship may have some bearing on the question, but is not determinative since this is a question of law based on objective tests.
Even where there is an absence of control over work details, an employer-employee relationship will be found if (1) the principal retains pervasive control over the operation as a whole, (2) the worker’s duties are an integral part of the operation, and (3) the nature of the work makes detailed control unnecessary. (Yellow Cab Cooperative v. Workers Compensation Appeals Board (1991) 226 Cal.App.3d 1288).
Other points to remember in determining whether a worker is an employee or independent contractor are that the existence of a written agreement purporting to establish an independent contractor relationship is not determinative.
So again, there is no clear cut answer to your question without knowing more details regarding your situation.
Frank W. Chen is licensed to practice law in the State of California. The information presented here is general in nature and is not intended, nor should be construed, as legal advice. This posting does not create any attorney-client relationship with the author. For specific advice about your particular situation, consult your own attorney.
I agree with Mr. Chen's excellent response. I write to add that this may be a joint employer situation, where you are employed by any or all of A, B and C.
You can pursue this issue with the California Division of Labor Standards Enforcement (DLSE). The DLSE is a sub-agency within the California Department of Industrial Relations. http://www.dir.ca.gov/dlse/. The DLSE enforces California's wage and hour laws, including those pertaining to overtime, rest and meal breaks, and more. The link for information on filing a wage claim is here: http://www.dir.ca.gov/dlse/howtofilewageclaim.htm.
*** All legal actions have time limits, called statutes of limitation. If you miss the deadline for filing your claim, you will lose the opportunity to pursue your case. Please consult with an experienced employment attorney as soon as possible to better preserve your rights. *** Marilynn Mika Spencer provides information on Avvo as a service to the public, primarily when general information may be of assistance. Avvo is not an appropriate forum for an in-depth response or a detailed analysis. These comments are for information only and should not be considered legal advice. Legal advice must pertain to specific, detailed facts. No attorney-client relationship is created based on this information exchange. *** Marilynn Mika Spencer is licensed to practice law before all state and federal courts in California, and can appear before administrative agencies throughout the country. She is eligible to represent clients in other states on a pro hac vice basis. ***
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