Employee or Independent Contractor?
Business owners hire people all the time. Depending on their status as an employee or independent contractor, however, the law treats them differently, affecting all facets of the relationship, including wages, taxes, etc. Employers who misclassify workers as independent contracts can end up with substantial tax bills and face penalties for failing to pay employment taxes and for failing to file required tax forms, so it is important that business owners understand the difference between employees and independent contractors.
In this multi-post blog series, we will look at two recent California cases involving Uber and Lyft, two of the most highly valued tech companies, on whether their drivers are employees, as opposed to independent contractors, under California law. We will start with Berwick v. Uber in our next post.
This posting is intended to be a planning tool to familiarize readers with some of the high-level issues discussed herein. This is not meant to be a comprehensive discussion and additional details should be discussed with your transaction planners including attorneys, accountants, consultants, bankers and other business planners who can provide advice for your circumstances. This article should not be treated as legal advice to any person or entity.
Steps have been taken to verify the contents of this article prior to publication. However, readers should not, and may not, rely on this article. Please consult with counsel to verify all contents and do not rely solely on this article in planning your legal transactions.
About the Author
Shawn McBride – R. Shawn McBride is the Managing Member of The R. Shawn McBride Law Office, P.L.L.C. which helps clients in legal issues related to starting companies, joint ventures, raising capital from and negotiating with investors and outside General Counsel functions. Shawn can be contacted at: 407-517-0064; [email protected].
 IRS, Employee vs. Independent Contractor—Seven Tips for Business Owners (IRS Summertime Tax Tip 2010-20,
 While this series focuses on the particular cases in California, the employee/independent contractor principles will be generally applicable in other states, though the law and the conclusion that another state reaches may be different.
See generally Berwick v. Uber Tech., Inc., CGC-15-546378 (State Case No. 11-46739 EK) (Sup. Ct. Cal., June 3, 2015) (proceeding before the Labor Comm’r of the State of Cal.).