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Employee vs. Independent Contractor and the Possible Impact of California Prop 22

Published:  November 9, 2020

A common issue in wage and hour law is whether an individual is appropriately classified as an employee or independent contractor.  In Massachusetts, a Court will make a determination as to whether an individual is an employee or independent contractor based upon the facts of the particular circumstance.  Erroneously classifying an employee as an independent contractor can have serious financial consequences for an employer, as the Massachusetts Wage Act provides for treble damages (up to three times the actual damages), interest and attorneys fees to be awarded.  The erroneous misclassification of an employee can also have an effect on an employer’s taxes, unemployment, workers' compensation, and other matters.

California recently took a different approach this topic by putting the question to a vote.  California Prop 22 was favored by a majority of California residents in the recent election.  Prop 22 means that app-based ride-share and delivery companies can hire drivers as independent contractors.  Drivers can decide when, where, and how much to work and not get standard benefits and protections that businesses must provide employees. Prop 22 effectively ends future litigation as to whether app-based ride-share and delivery companies are employees in California by mandating that drivers are contractors under the law. 

The attorneys at The Royal Law Firm will continue to monitor the ideas of Prop 22 will be adopted by other states.

If you have any questions about this topic, or any other labor and employment law matters, please feel free to contact the attorneys at The Royal Law Firm at 413-586-2288