Contractor vs employee classification in California

UPDATED: Sep 30, 2022

Advertiser Disclosure

It’s all about you. We want to help you make the right legal decisions.

We strive to help you make confident insurance and legal decisions. Finding trusted and reliable insurance quotes and legal advice should be easy. This doesn’t influence our content. Our opinions are our own.

UPDATED: Sep 30, 2022Fact Checked

Get Legal Help Today

Compare Quotes From Top Companies and Save

secured lock Secured with SHA-256 Encryption

Contractor vs employee classification in California

I am working as a full-time consultant for a company based in Europe. Due to the nature of the work arrangement I would be considered an employee by the IRS and my former state of residency state, and not a contractor. Due to this I had to move out of state to start my consultancy but since I am now looking to move back and I was wondering if there is a way for me to continue working as a consultant and not be classified as an employee. Since the company I work for is based in Europe, it’s impossible for them to employee me in the U.S. At the moment I am only working for one employer 40 hours a week. Would incorporating help or hiring staff and looking for new clients?

Asked on August 10, 2016 under Employment Labor Law, New York


SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 6 years ago | Contributor

An independent contractor is, as the term implies, "independent," at least to some degree. Working for only one employer 40 hours per week  is very much against you--those are indicia of being an employee. If the company also has a say in the hours you work and/or can tell you how to do your job (i.e. they don't just give you projects, etc. to do, but actively manage you to a greater or lesser degree), it will be very difficult to show you are a consultant, not an employee. Conversely, you will be in much better shape if you set your own hours and decide yourself how to complete the projects you are given.
In either case, the things you suggest would be very helpful, and while not guarantying a favorable classification, will make it considerably more likely: setting up (and doing your work through) an LLC or corporation is the single strongest thing you can do; it will also help to yourself hire staff (even part time) and to actively market yourself and look for additional clients. These are al lthings done by independent contractors. If it is important for you to be a consultant, then you should do the things you suggest.

IMPORTANT NOTICE: The Answer(s) provided above are for general information only. The attorney providing the answer was not serving as the attorney for the person submitting the question or in any attorney-client relationship with such person. Laws may vary from state to state, and sometimes change. Tiny variations in the facts, or a fact not set forth in a question, often can change a legal outcome or an attorney's conclusion. Although has verified the attorney was admitted to practice law in at least one jurisdiction, he or she may not be authorized to practice law in the jurisdiction referred to in the question, nor is he or she necessarily experienced in the area of the law involved. Unlike the information in the Answer(s) above, upon which you should NOT rely, for personal advice you can rely upon we suggest you retain an attorney to represent you.

Get Legal Help Today

Find the right lawyer for your legal issue.

secured lock Secured with SHA-256 Encryption