Your company may call you an independent contractor, pay you on a 1099, and require you to sign a contractor agreement. None of those facts settles your status under California law. What matters is the work you actually do, the business you do it for, and which legal test applies.
If you were classified as a contractor but should have been treated as an employee, you may be owed overtime, minimum wages, meal or rest break premiums, reimbursement of work expenses, or other amounts. The value of a claim depends on your hours, pay, expenses, the applicable deadlines, and the evidence—not merely the fact that the company used the wrong label.
California’s ABC Test
For most claims under California’s Labor Code and wage orders, the starting point is the ABC test. The hiring business must establish all three of these points to classify a worker as an independent contractor:
- Freedom from control: You are free from the business’s control and direction in performing the work, both under your contract and in practice.
- Work outside its usual business: The work you perform is outside the usual course of the hiring business’s operations.
- Your own established business: You are customarily engaged in an independently established business, trade, or occupation of the same kind.
If the business cannot prove any one of these requirements, it generally cannot treat you as a contractor under the ABC test. This is why part B can matter even where a worker chooses a schedule and needs little supervision. A retail store hiring an outside plumber to fix its restroom is different from a cleaning company hiring cleaners to serve its customers.
What if I Signed a Contractor Agreement or Have an LLC?
A 1099, invoices, flexible hours, a contractor agreement, or an LLC can be relevant facts, but none automatically determines your status. The company cannot change an employee into a contractor simply by changing paperwork or payroll. At the same time, working for one client or using that client’s equipment does not, by itself, answer every classification question. The full relationship and applicable legal test matter.
When Does the Borello Test Apply Instead?
California law has exceptions for some occupations and contracting relationships. Depending on the specific requirements, the Borello test may apply instead of the ABC test. Borello weighs several factors, including the right to control the work, whether the worker operates a distinct business, who provides tools, the opportunity for profit or loss, how payment works, and whether the work is integral to the hiring business. No single factor necessarily controls.
Examples of potentially covered arrangements include certain licensed professionals, qualifying professional services, and bona fide business-to-business relationships. An exception from the ABC test does not automatically make someone an independent contractor; it changes the analysis. App-based transportation and delivery drivers may also be subject to separate Proposition 22 rules. Classification can vary with the type and date of the claim, so avoid assuming that one agency’s decision answers every question.
What Could You Recover if You Were Misclassified?
Depending on the facts and the law governing your work, possible claims may include:
- Unpaid minimum wages or overtime;
- Meal and rest break premiums;
- Reimbursement for necessary business expenses;
- Unpaid wages due when the work ended, and potentially applicable penalties; and
- Other employee protections, such as paid sick leave or unemployment benefits, where the governing requirements are met.
Misclassification alone does not establish a large damages award. For example, someone paid well above minimum wage who worked no overtime and incurred few unreimbursed expenses may have a much smaller wage claim than someone who worked long hours, paid for substantial job costs, and received no breaks. Even when you qualify as an employee, a separate overtime exemption could affect the overtime analysis.
Questions To Ask About Your Situation
- What does the company sell, and is your work part of that service or product?
- Who sets your rates, assignments, deadlines, and working methods?
- Do you advertise similar services to the public and serve other clients?
- What did you earn, how many hours did you work, and what expenses did you pay?
- Were you paid overtime, given meal and rest breaks, or reimbursed for expenses?
- Are you still working there, and have you already raised concerns?
The answers help determine both whether you were misclassified and whether pursuing a claim is worthwhile.
If a California business has paid you as a 1099 contractor and you believe you worked as an employee, contact us to discuss your role, pay, hours, and options. We also advise businesses evaluating contractor arrangements and responding to classification disputes.