Who are independent contractors and freelancers?

Today, nearly 2 million Californians are choosing to work independently, either full time or to supplement their primary income. These include freelancers who work in the most dynamic sectors of the state’s economy, such as engineers, software developers, designers, therapists, insurance agents, accountants, financial advisers, consultants, writers, hair stylists, editors, drivers, and artists. In fact, nearly half of all millennials currently freelance.

With the advancement of innovation, this diverse California workforce will have even more opportunities to choose independent work in the near future. According to a survey commissioned by Upwork and the Freelancers’ Union, more and more people will continue to choose independent work.

What does the court decision actually do?

In Dynamex, the California Supreme Court abandoned a long established balancing-of-factors test previously adopted by the Court in a 1989 decision: S.G. Borello & Sons, Inc. v. Dept. of Industrial Relations (“Borello”). This approach weighed nine different factors in their totality to account for the variety of California industries and professions, as well as diversity of California’s workers. Under Dynamex, the Court presumes that a worker is an employee unless the hiring party establishes all three of a one-size-fits all test. This test, referred to as the “ABC” test has never before existed in California. It is both the most restrictive form of the ABC test found anywhere in the country, and the Dynamex decision marks the first time in U.S. history that any form of the ABC test has been imposed by a court without any legislative approval.

Why do Californians choose to work as freelancers, versus traditional employment?

The top reasons that motivate individuals to pursue independent work include: 1) to be their own boss, 2) to choose when they work, 3) to choose their own projects, 4) to choose where they work, and 5) to earn extra money. Whether to pursue an education, care for their families, or adopt to a preferred lifestyle, many Californians prefer the flexible schedule and other opportunities that freelancing provides. In certain professions, it is also beneficial to work for multiple firms on multiple projects, or to change firms frequently to increase economic stability. Californians are choosing to work full-time as independent contractors and others are using the opportunity to supplement their income.

In fact, 79 percent of independent contractors prefer it over traditional employment according to the Bureau of Labor Statistics Economic Release (June 7, 2018). A 2017 survey also found that a majority of freelancers who left a full-time job made more money within a year.

Join Us