In July, the California Court of Appeal ruled that a decision made by the California Unemployment Insurance Appeals Board (the Board) decision had precedential effect in the plaintiff’s subsequent attempt to invalidate the Board’s ruling in the California Superior Court.
Plaintiff claimed the Board erroneously assessed unemployment insurance employer contributions and penalties against a particular employer because the employees involved were not employees but independent contractors. Plaintiff disagreed with the Board’s ruling that employee status and independent contractor status should be determined in this tax contribution case by the same factors established in previously decided worker’s compensation cases. Therefore, Plaintiff argued that the Board’s decision should not have been given precedential effect.
Both the Superior Court and Fourth Circuit Court of Appeals agreed with the Board and held that the common law factors for determining employee status from independent contractor status, despite their derivation from worker’s compensation cases, were binding in this tax contribution decision. Thus, the Board’s decision was given precedential effect and Plaintiff was denied declaratory relief.
The modern trend is to find employment when the work being done is an integral part of the regular business of the employer and the worker does not furnish an independent business or professional service relative to the employer. Improper classification can give rise to myriad claims by employees.