Worker Misclassification

When a franchisor provides a California franchisee with detailed instructions about how to operate the franchise business, but allows the franchisee to manage its own workforce, can the franchisor be held liable for the franchisee’s wage and hour violations?  The California Court of Appeals found the answer to be no.
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The California Supreme Court has adopted a new three-part test to determine whether a worker is an independent contractor or an employee under California’s wage orders, which regulate wages, hours, and working conditions.  The highly anticipated ruling could have wide ranging effects for businesses operating in California and beyond, as companies try to navigate the new gig economy. 
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Recently the National Labor Relations Board invited interested parties and amici to submit briefs in Velox Express, Inc. to address under what circumstances, if any, the Board should deem an employer’s misclassifying statutory employees as independent contractors constitutes a violation of Section 8(a)(1) of the National Labor Relations Act.  Briefs from parties and interested amici must be submitted on or before April 16, 2018.
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