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Dynamex Update!

In Dynamex Operations West, Inc. v. Superior Court, the California Supreme Court adopted the “ABC Test” in determining whether an individual is an employee or independent contractor under the state Industrial Welfare Commission Wage Orders.  This decision drastically changed the standards in California for the classification of workers as independent contractors. Now, the California Supreme Court has provided long-awaited guidance on whether Dynamex applies retroactively.

On January 14, 2021, the California Supreme Court issued the long-awaited decision in Vasquez v. Jan-Pro Franchising International, Inc. a 21-page opinion holding that Dynamex applies retroactively. In concluding that the standard set forth in Dynamex applies retroactively, the Court relied on the fact that the Dynamex decision addressed an issue of first impression and did not change settled law. Given that the Court had not previously issued a definitive ruling on the issues addressed in Dynamex, there was no reason to depart from the general rule that judicial decisions are given retroactive effect. Given the Court’s decision to apply Dynamex retroactively, the Dynamex standard applies to all cases that were not yet final as of April 30, 2018 (the date Dynamex became final).

In light of the opinion in Vasquez, it is a great reminder for employers to ensure that their employees are properly classified. Misclassification can lead to extensive wage & hour issues for employers.  To learn more about Dynamex and how the California Supreme Court’s decision in Vasquez affects your current business practices, please contact the Employer Lawyers at Chauvel & Glatt.

The material in this article, provided by Chauvel & Glatt, is designed to provide informative and current information as of the date of the post. It should not be considered, nor is it intended to constitute, legal advice or promise similar outcomes.  For information on your particular circumstances, please contact Chauvel & Glatt at 650-573-9500. (photo credit: 123rf.com)

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