Sick Leave Laws for Misclassification of a W2 Employee as an Independent Contractor in California

Under California labor laws, employees are eligible for paid sick leave. However, independent contractors are generally not given sick leave. Some employers illegally misclassify workers as independent contractors to avoid having to provide sick leave, overtime, and rest breaks.

Below, our California wage and hour lawyers discuss the following frequently asked questions about lawsuits for sick leave for misclassified California employees:

Under California labor laws, employers are required to provide all employees with paid sick leave.

If you have further questions after reading this article, we invite you to contact us at Shouse Law Group.

1. Do I get sick leave for my job in California?

Under California labor laws, employers are required to provide all employees with paid sick leave. All employees who work at least 30 days a year are entitled to paid sick days.¹

Employees accrue paid sick leave at a rate of not less than one (1) hour per 30 hours worked. However, alternative methods of accrual are allowed so long as they meet certain minimum paid sick leave standards.²

For example, if an employee works part-time at 15 hours per week. After four (4) weeks, the employee would accrue a minimum of 2 hours of paid sick leave (4 weeks x 15 hours = 60 hours / 30 hours = 2 hours paid sick leave). A full-time employee (40-hour workweek) would accrue 4 hours of paid sick leave for 3 weeks of work (3 weeks x 40 hours = 120 hours / 30 hours = 4 hours paid sick leave).

Paid sick leave is required under California labor laws for both exempt and non-exempt workers in California. Some white-collar workers who meet the requirements for an exempt worker may not be subject to California overtime laws and California minimum wage laws. However, all employees must be provided with paid sick leave.³

2. Do independent contractors get sick leave in California?

There are very few exceptions to required sick leave for workers in California. This includes employees who provide short-term, seasonal, or limited work for an employer if they work less than 30-days for an employer in a year.⁴

Independent contractors are not subject to California labor laws requiring paid sick leave.

Independent contractors are also exempt from California labor laws requiring:

Overtime pay
Minimum wage
Meal breaks
Paid rest breaks

3. How do I know if I’m an independent contractor or an employee?

The difference between an employee and an independent contractor under California labor law is that an independent contractor performs services for another, where:

The person performing services is promised a specific payment for a specific result; and
The person performing services retains control over how the task was performed.⁵

The Division of Labor Standards and Enforcement (DLSE) begins with a presumption that any person rendering service for another is an employee.⁶

There are a number of other factors that may be considered in determining whether a person is working as an employee or independent contractor. This includes:

Whether the person is engaged in a distinct occupation;
The type of services performed;
The skill and experience required for the service;
Whether the person receiving the services has the right to fire the service provider without cause;
The method of payment;
Whether the person performing the service provides his or her own tools and place of work; and
Whether the parties believe they are entering an employer/employee relationship.⁷

Just because you sign a contract stating you are an independent contractor does not control whether you are or are not considered an employee under California labor laws. An employer-employee relationship will be found where the nature of the work and the relationship with the person hiring you indicate an employment relationship.⁸

Similarly, just because you were issued a 1099 form instead of a W-2 form is definitive evidence that you are an independent contractor under California law.⁹

4. Should I talk to my employer about getting sick leave if I think I am misclassified as an independent contractor?

Some employers may intentionally misclassify employees as independent contractors in violation of California labor law and the federal Fair Labor Standards Act (FLSA).

An employer may intentionally misclassify a W2 employee as an independent contractor for a number of reasons, including saving money by avoiding the cost and regulations of:

Payroll taxes
Minimum wage
Overtime pay
Meal periods and rest breaks
Reimburse workers for business expenses
Workers’ compensation insurance
Unemployment insurance
Disability insurance
Social security

As an employee, an individual generally has greater legal protections. This includes providing mandatory minimum benefits, including paid sick leave.

Some employees may not want to question their employer about misclassification as an independent contractor. However, as an employee, the worker may be able to earn additional pay, mandatory rest breaks, and be able to take paid time off from work when they are sick or have to care for a sick family member.

5. Can I sue my employer for misclassifying me as an independent contractor?

An employee who has been misclassified may be able to file a wage claim lawsuit against their employer to recover damages.

The damages available in a labor law violations lawsuit may depend on whether the employee was an exempt employee or a non-exempt employee. If a non-exempt employee was misclassified as an independent contractor, the damages may include:

Unprovided sick leave
Unpaid overtime
Minimum wage violations
Missed rest breaks
Missed meal breaks
Interest
Legal fees
Court costs¹⁰

Additionally, under federal law, any employer who violates provisions of the FLSA wage and hour laws may be liable to the employee or employees for double damages. This includes the amount of their compensation and an additional equal amount as liquidated damages.¹¹

In addition to civil penalties, an employer who intentionally misclassifies an individual as an independent contractor can face stiff penalties. For each violation, an employer can face a penalty of between $5,000 and $15,000.¹²

If the employer has engaged in a pattern or practice of misclassifying employees, they may face increased penalties of between $10,000 and $25,000 for each violation.¹³

When an employer misclassifies one employee as an independent contractor, they are likely misclassifying other employees, or have done so in the past. These employers may continue to take advantage of employees by misclassifying them unless they are held accountable for their actions.

Employees who have been misclassified as independent contractors may be part of a larger group of employees owed damages by their employer. This can result in a successful California wage and hour class action lawsuit involving a number of claims for unpaid wages for overtime.

6. Can my boss fire me for asking if I might be misclassified as an independent contractor?

An employer cannot retaliate against an employee for asking an employer about whether they may be misclassified as an independent contractor.¹⁴

If an employer fires an employee or takes retaliatory action against an employee for pointing out labor law violations, the employer may be engaging in “wrongful termination”.

An employer who engages in illegal retaliation may be required to reinstate the employee, pay lost wages, and pay fines of up to $10,000 per employee. This includes punishing workers for:

Speaking up about misclassification as an independent contractor
Talking to the employer about wages or breaks owed to them;
Filing a wage claim; or
Filing a complaint with a government agency.¹⁵

Call us for help.

For questions about California sick leave laws, independent contractor status, or to discuss your case confidentially with one of our California labor and employment attorneys, do not hesitate to contact us at Shouse Law Group.

We have local employment law offices in and around Los Angeles, San Diego, Orange County, Riverside, San Bernardino, Ventura, San Jose, Oakland, the San Francisco Bay area, and several nearby cities.

Work in Nevada? See our article on Nevada sick leave laws.

Legal References:

Labor Code 246 LC — Paid Sick Days (“(a)(1) An employee who, on or after July 1, 2015, works in California for the same employer for 30 or more days within a year from the commencement of employment is entitled to paid sick days as specified in this section.”)
Labor Code 246 LC — Paid Sick Days (“(b) (1) An employee shall accrue paid sick days at the rate of not less than one hour per every 30 hours worked, beginning at the commencement of employment or the operative date of this article, whichever is later, subject to the use and accrual limitations set forth in this section.”)
Labor Code 246 LC — Paid Sick Days (“(2) An employee who is exempt from overtime requirements as an administrative, executive, or professional employee under a wage order of the Industrial Welfare Commission is deemed to work 40 hours per workweek for the purposes of this section, unless the employee’s normal workweek is less than 40 hours, in which case the employee shall accrue paid sick days based upon that normal workweek.”)
Labor Code 246 LC, endnote 1 above.
Labor Code 3353 LC — Independent contractor. (“Independent contractor” means any person who renders service for a specified recompense for a specified result, under the control of his principal as to the result of his work only and not as to the means by which such result is accomplished.”)
Labor Code 3357 LC — Employees. (“Any person rendering service for another, other than as an independent contractor, or unless expressly excluded herein, is presumed to be an employee.”)
G. Borello & Sons, Inc. v. Department of Industrial Relations (1989) 48 Cal.3d 341, 350–51. (“However, the courts have long recognized that the “control” test, applied rigidly and in isolation, is often of little use in evaluating the infinite variety of service arrangements. While conceding that the right to control work details is the “most important” or “most significant” consideration, the authorities also endorse several “secondary” indicia of the nature of a service relationship. Thus, we have noted that “^strong evidence in support of an employment relationship is the right to discharge at will, without cause. ^Citations.” *351 ( Tieberg, supra, 2 Cal.3d at p. 949, quoting Empire Star Mines, supra, 28 Cal.2d at p. 43.) Additional factors have been derived principally from the Restatement Second of Agency. These include (a) whether the one performing services is engaged in a distinct occupation or business; (b) the kind of occupation, with reference to whether, in the locality, the work is usually done under the direction of the principal or by a specialist without supervision; (c) the skill required in the particular occupation; (d) whether the principal or the worker supplies the instrumentalities, tools, and the place of work for the person doing the work; (e) the length of time for which the services are to be performed; (f) the method of payment, whether by the time or by the job; (g) whether or not the work is a part of the regular business of the principal; and (h) whether or not the parties believe they are creating the relationship of employer-employee. ( Tieberg, supra, at p. 949; Empire Star Mines, supra, 28 Cal.2d at pp. 43-44; see Rest.2d Agency, § 220.) (4a) “Generally, … the individual factors cannot be applied mechanically as separate tests; they are intertwined and their weight depends often on particular combinations.” (Germann, supra, 123 Cal.App.3d at p. 783.)”)
Yellow Cab Cooperative, Inc. v. Workers’ Comp. Appeals Bd. (1991) 226 Cal.App.3d 1288, 1297. (“Even in the common law setting, a formal agreement characterizing the relationship as independent contractorship “will be ignored if the parties, by their actual conduct, act like ’employer-employee.’ Indeed, the attempt to conceal employment by formal documents purporting to create other relationships has led the courts to disregard such terms whenever the acts and declarations of the parties are inconsistent therewith.”)
Toyota Motor Sales v. Superior Court (1990) 220 Cal.App.3d 864, 877. (“Attempts to conceal employment by formal documents purporting to create other relationships have led the courts to disregard such terms whenever the acts and declarations of the parties are inconsistent therewith.”)
Labor Code 1194 LC — Action to recover minimum wage, overtime compensation, interest, attorney’s fees, and costs by employee. (“(a) Notwithstanding any agreement to work for a lesser wage, any employee receiving less than the legal minimum wage or the legal overtime compensation applicable to the employee is entitled to recover in a civil action the unpaid balance of the full amount of this minimum wage or overtime compensation, including interest thereon, reasonable attorney’s fees, and costs of suit. (b) The amendments made to this section by Chapter 825 of the Statutes of 1991 shall apply only to civil actions commenced on or after January 1, 1992.”)
29 U.S.C. 216(b) — Damages; right of action; attorney’s fees and costs; termination of right of action. (“Any employer who violates the provisions of section 206 or section 207 of this title shall be liable to the employee or employees affected in the amount of their unpaid minimum wages, or their unpaid overtime compensation, as the case may be, and in an additional equal amount as liquidated damages.”)
Labor Code 226.8 LC (“(b) If the Labor and Workforce Development Agency or a court issues a determination that a person or employer has engaged in any of the enumerated violations of subdivision (a), the person or employer shall be subject to a civil penalty of not less than five thousand dollars ($5,000) and not more than fifteen thousand dollars ($15,000) for each violation, in addition to any other penalties or fines permitted by law.”)
Labor Code 226.8 LC (“(c) If the Labor and Workforce Development Agency or a court issues a determination that a person or employer has engaged in any of the enumerated violations of subdivision (a) and the person or employer has engaged in or is engaging in a pattern or practice of these violations, the person or employer shall be subject to a civil penalty of not less than ten thousand dollars ($10,000) and not more than twenty-five thousand dollars ($25,000) for each violation, in addition to any other penalties or fines permitted by law.”)
Labor Code 98.6 LC — Discharge or discrimination, retaliation, or adverse action against employee or applicant for conduct delineated in this chapter or because employee or applicant has filed complaint or claim, instituted or caused to be instituted any proceeding under or relating to his or her rights or testified relating to the same on behalf of that person or another whistleblower protection for reporting wage/hour or labor law violations.
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