Employee vs. Independent Contractor

In the latest case to weigh in on who is an employee and who is not, we have the case Garcia v. Border Transportation Group just issued on October 22 and decided by the California Fourth Appellate District and certified for partial publication. The case clarifies that the 1989 California Supreme Court case of S.G. Borello & Sons, Inc. v. Department of Industrial Relations still defines the factors to be used to determine who is an employee and who is an independent contractor in the workers’ compensation arena.

Until this new Garcia case some people argued that the more liberal multi-part test described in the case of Dynamex Operations West, Inc. v. Superior Court, decided April 30, 2018 replaced the Borello & Sons standard. However, both the Dynamex Operations case and the new Garcia case were not workers’ compensation cases. Both of those cases involved disputes over wages and other issues. Neither involved a workers’ compensation claim.

So how does Garcia v. Border Transportation Group clarify the determination as to who should be an independent contractor and who is an employee?

Mr. Garcia was a taxi driver who had an employment agreement that specified he was an independent contractor. He initially bought a vehicle using the Border Transportation Group’s color scheme; he leased a vehicle permit from BTG and he paid a monthly fee for radio dispatch services. When his original taxi became inoperable, Mr. Garcia began to lease a vehicle from BTG and paid a per-shift fee for that lease in addition to the other fees he was already paying. He later sued BTG claiming wage ordinance violations, unpaid overtime, wrongful termination and unfair competition. When Mr. Garcia lost his case in Superior Court following a order of summary judgment, Mr. Garcia appealed.

On appeal the Fourth District Court looked at both the Dynamex case and Borello & Sons and determined that although Mr. Garcia was an employee under the Dynamex test for purposes of Mr. Garcia’s wage-related claims, the Dynamex case did not replace the Borello & Sons standard for evaluating whether a worker is to be classified as an independent contractor or as employee.

According to the Dynamex test the factors to look at to determine who is an employee and who is an independent contractor are:

  1. A worker is presumed to be an employee unless the hirer establishes the worker was free from control and direction in connection with performing the work;

  2. The work being done is outside of the hiring entity’s usual business;

  3. That the worker is customarily engaged in an independently-established occupation, trade or business of the same nature as the work being done by the worker.

In comparison, the court in Borello & Sons affirmed that the distinction between employee and independent contractor rests primarily on the issue of control of the work. It is a question of fact depending on the evidence presented. Furthermore, the burden of proof rests on the party seeking to avoid liability. The court will look at factors such as:

  1. Whether the person doing the work is engaged in a distinct occupation or business;

  2. The type of occupation and whether it usually is or is not done without supervision;

  3. The skill required;

  4. Who supplies the tools, instrumentalities and place of work;

  5. The length of time the services are to be provided;

  6. Whether payment for the work is based on time or by the job;

  7. Whether the work is part of the regular business of the hirer; and

  8. Whether the parties believed they were creating an employer-employee relationship.

The court in Borello concluded that Borello & Sons failed to prove that the sharefarmers were independent contractors.


Under California workers’ compensation law the rationale and factors to review for an employee vs. independent contractor are still controlled by the S.G. Borello & Sons case. The more liberal test for deciding who is an employee under the Dynamex case does not apply (yet) to California workers’ compensation cases.

We have the new case of Garcia v. Board of Transportation Group to thank for maintaining the distinction and the standards to be applied for determining the issue of employee vs. independent contractor.

Ira Johns, Esq.
Los Angeles Office

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