In September 2018, in In the Matter of the Appeal of Membership Determination of Tracy C. Fuller, Respondent, and Cambria Community Services District, Respondent, the CalPERS Board of Administration adopted a proposed decision by an Administrative Law Judge determining that, based on the common law employment test, a temporary employee hired through Regional Government Services (RGS) was a statutory employee of the public agency and should have been enrolled into CalPERS membership when she began work for the public agency.
More specifically, in the Fuller decision, the ALJ determined that although Fuller was brought in as an employee of RGS, which contracted with CCSD as an independent contractor to provide services as its Interim Finance Manager following the retirement of its longtime Finance Manager, Fuller nevertheless should have been brought into membership when she began working for CCSD, and the ALJ ordered CCSD to pay the membership contributions for the eight months that Fuller was employed as CCSD’s Interim Finance Manager through RGS and administrative costs, despite CCSD’s argument that Fuller was not its employee and therefore did not have to be enrolled. The proposed decision also addressed issues related to the common law employment test, hiring of the individual through labor suppliers, and co-employment.
Although it does not appear that CalPERS will adopt the Fuller decision as precedential, given the potential of CalPERS’ staff extending its applicability in determining employee status in the event of a CalPERS audit, public agencies which contract with CalPERS should nevertheless consider taking proactive steps to maintain a “bright line” to satisfy the independent contractor factors set forth in applicable case laws, both for independent contractors as well as retired annuitants who perform work for public agencies.
Separately, in Dynamex Operations W. v. Superior Court (2018) 4 Cal.5th 903, the California Supreme Court specified that with respect to state wage orders, all three of the following factors must be met for a worker to be properly classified as an independent contractor: i) the worker is free from the control and direction of the hiring entity in connection with the performance of the work, both under the contract for the performance of the work and in fact; ii) the worker performs tasks that are outside the usual course of the hiring entity's business; and, iii) the worker is customarily engaged in an independently established trade, occupation or business of the same nature as the work performed for the hiring entity. Particularly, the second requirement that the worker performs tasks that are outside the usual course of the hiring entity's business, may make it particularly difficult for most employers to satisfy. To make matters even more complicated, in a recent decision by the Ninth Circuit Court of Appeals, Vazquez v. Jan-Pro Franchising International, Inc. (2019) 923 F.3d 575, the court held that Dynamex should be applied retroactively.
In order to assist California public agencies to mitigate the risk of hiring third-party independent contractors (thus avoiding the risk of CalPERS deeming that an employee of a third-party independent contractor could be a common-law employee of the agency), as well as the complications created by the Supreme Court's Dynamex decision, this webinar will address the following issues:
Exceptions Under the Public Employment Retirement Act (“PERL”) for Independent Contractors;
Review of Applicable Case Laws Defining the Primary Test for Determining an Independent Contractor (the “Common Law Control Test”), including Metropolitan Water Dist. v. Superior Court (2004) 32 Cal.4th 491, Tieberg v. Unemployment Ins. App. Bd. (1970) 2 Cal.3d 943, Southwest Research Institute v. Unemployment Ins. Appeals Bd. (2000) 81 Cal.App.4th 705, CalPERS Circulars, and IRS Regulations;
An In-Depth Analysis of the CalPERS' Fuller Decision;Legal Analysis and Recommendations to Maintain a “Bright Line” For Hiring Independent Contractors;
Factors Set Forth in the Dynamex Decision With Respect to State Wage Order Issues;
Exceptions Under the Public Employment Retirement Act (“PERL”) for Retired Annuitants;
Hiring of "1,000 Hour Temps";
Recommendations / Tips and Pitfalls to Avoid;
Questions and Answers.
Join two of CalGovHR's trusted legal experts and attorneys, Linda Daube and Christopher Boucher, as they walk you through the various decisions along with their expert legal analysis, as well as recommendations and practical pointers for public agency HR professionals to implement to mitigate the risk of making your next "independent contractor" an employee of the agency.
Presenters: Linda L. Daube, Esq., Law Office of Linda L. Daube & Christopher K. Boucher, Esq., Wiley Price & Radulovich, LLP.
Credits Offered: 1.5 SHRM & HRCI Recertification Credits; 1.5 Attorney MCLE Credits.
HRCI, SHRM, and MCLE Recertification Credits Available
CalGovHR is a SHRM Recertification Provider. This Institute program is valid for 1.5 PDCs toward SHRM-CP and SHRM-SCP recertification.
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The Association for California Governmental Human Resources Professionals (CalGovHR) is an approved State Bar of California MCLE provider #18682 and certifies that the Workers’ Compensation for HR Professionals workshop is approved for 1.5 hours of General MCLE credit.
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