Dynamex Contractors Sought Unpaid Overtime
Dynamex is a national same-day package and document delivery service that operates in California, and has delivered packages for Amazon. A former driver alleged that he had been wrongfully classified as an independent contractor in violation of IWC Wage Order No. 9, which governs the transportation sector, and like wage orders governing other industries, requires employers to pay for overtime. In a bid to save money in 2004, Dynamex reclassified its employees as independent contractors. Their duties did not change pursuant to the reclassification. The Dynamex workers’ complaint contained multiple causes of action stemming from the wage order, including alleged failure to pay overtime wages, failure to provide accurate wage statements, and other statutory causes of action—such as the failure to reimburse employees for fuel and toll costs.
Employee or Independent Contractor? ABC Test—With Examples
The Court ruled against Dynamex, holding that employers must presume workers are employees (and pay them accordingly), unless the following criteria are met (the so-called ”ABC test”):
A) The worker is free from the control and direction of the hiring business in connection with the performance of the work, both under the contract for the performance of such work and in fact;
B) That the workers performs work that is outside the usual course of the hiring entity’s business; and
C) That the worker is customarily engaged in an independent established trade, occupation, or business of the same nature as the work performed for the hiring entity.
The court chose this test in favor of the one suggested by Dynamex’s legal team, because it purportedly provides “greater clarity and consistency” for the public. However, it still is not clear exactly how this test will be applied. Fortunately, the Court gave a few examples.
If a retail establishment hired a plumber to fix a leak, the plumber would probably not be classified as an employee entitled to overtime because they are performing work outside the usual course of the retailer’s business. But if an employer outsources the work they do routinely, for example, if a clothing manufacturer hires work-at-home seamstresses, or a bakery hires at-home bakers to design custom cakes on a regular basis, these workers would likely be classified as employees, because they are part of the employer’s usual business operations.
Donning and Doffing Lawsuit Under Dynamex Test?
The Dynamex decision is undeniably groundbreaking, and the extent of its reach is still uncharted terrain. Although it only applies to alleged misclassifications under California wage orders, it is unclear whether employers will use the same test for payroll taxes, unemployment, business expense reimbursement, etc., in order to remain consistent.
However, it does appear that misclassified independent contractors could bring a donning and doffing lawsuit under the new test. Because certain IWC wage orders require thirty-minute meal breaks, where employees must be ”relieved of all duty” during that time, requiring employees to don, doff, or clean protective equipment during that time could be deemed a wage order violation.
California Unpaid Wages Lawsuit News: Dynamex Could Solve Other Problems, Not Just Overtime Avoidance
READ MORE CALIFORNIA UNPAID WAGES LEGAL NEWS
If you suspect that your employer may be taking advantage of the current gig economy by misclassifying you as an independent contractor, you may want to contact an experienced employment attorney regarding possible unpaid wages. Under the recent decision in Dynamex, workers are presumed to be employees entitled to overtime pay unless an employer can establish otherwise.