This document summarizes California contractor law and the Dynamex v. Superior Court case. It discusses how the Dynamex ruling established a new "ABC test" for determining whether a worker is an employee or independent contractor. The test makes it more difficult to classify someone as a contractor by requiring they have an established business. The document warns companies about risks of misclassifying employees as contractors and provides tips for staying compliant with the new standards. It promotes the services of Braden Drake Law for legal and tax advice related to contractor classification.

1. C A L I F O R N I A
C O N T R A C T O R
L A W
B R A D E N D R A K E L A W

2. HI, I'M BRADEN
Lawyer
Tax consultant/preparer
WeWorker
Runner
Enneagram 7
ENTJ

3. A C C O R D I N G T O T H E
I N T E R N E T
of the U.S. work force are contract workers
20%

4. DYNAMEX V. SUPERIOR COURT
8 0 P A G E S O F F U N
OLD LAW VERSUS NEW LAW

5. T H E O L D L A W

6. DYNAMEX V. SUPERIOR COURT
A) The worker must be "free from the control and direction of the
hirer;
B) The worker must "perform work that is outside the course of
the hiring entity's business"; and
C) The worker must "customarily be engaged in an
independently established trade, occupation, or business of
the same nature as the work performed for the hiring entity.

7. THE PRACTICAL EFFECT
Dynamex dealt specifically with wage orders. It has not spread to
all areas of contract law.
We really have no idea what's going to happen, but let's make
some educated guesses and plan accordingly.

8. PART C
Key Takeaway: "Established Business"
Look for: EIN, equipment, social media, business bank account,
presence, other marketing, local business license, website,
business entity.

9. PART B
Does frequency matter?
"If a bakery hires cake decorators to work on a regular basis,
then those cake decorators are likely working within the bakery's
'usual business operation,' and thus would be employee."

10. PART B
The court also provides an example of an art instructor hired to
teach at a museum "on a regular and continuous basis."

11. PART B
What if the worker is working on a regular, continuous basis?
- May be time to reclassify; or
- Assess your risk

12. "Dynamex Employee"
Some Tips:
- Make sure the worker uses their own equipment
- Ensure that the contractor has taken steps to form their own
business
- Put an arbitration clause in your contractor agreement
- Know the wage orders and stay in compliance

13. Employee, Employee
Time to reclassify

14. Risks of Misclassification
Lawsuits from misclassified works for overtime and meal
break violations
Attorneys fees and court costs
An audit by the labor board for payroll taxes
IRS penalties
$5,000-$15,000 penalties per misclassified employee under
CA labor law

15. S T A Y I N T O U C H
C A T C H M E O N T H E G R A M :
C R E A T I V E P R E N E U R C O N S U L T I N G

16. F R E E B I E S & E V E N T S
D I Y T A X P A R T I E S
T A X F R E E B I E S
L E G A L F R E E B I E S
S M A L L B U S I N E S S S T A R T U P G U I D E
D I G I A L N O M A D T A X G U I D E

17. Q U E S T I O N S
B R A D E N D R A K E L A W . C O M
C R E A T I V E P R E N E U R C O N S U L T I N G . C O M