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Employee Vs Independent Contractor: Know the Major California EDD Judicial Precedents

Without fail, EDD Board administrative law judges, when issuing a formal written opinion, will cite one or more of the following four precedent decisions prior to discussing the specific facts in your case and reaching the ultimate decision on your matter.

Empire Star Mines v. California Employment Commission, 28 Cal.2d 33 (1946). In this case, the Supreme Court held that the most important factor is whether you have the right to control the manner and means by which the work is done. The Court set forth several standards and tests for control. These are not the same as the IRS"s 20-factor test set forth in Rev. Rul. 87-41, 1987-1 CB 296.

Tieburg v. California Unemployment Insurance Appeals Board, 2 Cal.3d 42 (1970). In this case, the Supreme Court held that the most significant factor is the right of control. The existence of a written independent contractor agreement is not the controlling factor.

Gibson v. California Unemployment Insurance Appeals Board, 9 Cal.3d 494 (1973). This decision made it even more difficult to establish an independent contractor relationship because the provisions of the law governing worker classification are to be conservatively construed in favor of an employer-employee relationship.

S.G. Borello & Sons v. Department of Industrial Relations, 48 Cal.3d 341 (1989). This case established a new multifactor test. If the principal has the right to determine the manner mans by which the work is to be performed, the relationship is more likely to be that of employer-employee. Actually exercising this right is not important; having the right is the key. This case also looks at the skills required to perform the job. Minimum skills more than likely will establish an employer-employee relationship, e.g., field farm workers who might work without supervision, but whose skill-level is not great.