Dealing with Discrimination as an Independent Contractor in California

Typically, claims of discrimination or harassment are brought by employees against their employers under state laws like California’s Fair Employment & Housing Act or Family Rights Act or federal laws such as the Family Medical Leave Act, Americans with Disabilities Act, Civil Rights Act of 1964 or the Age Discrimination in Employment Act (ADEA). With over 10 million independent contractors in America who do not have official “employee” status, many protections offered under state or  federal law are not afforded to these workers.

However, a new California law called AB5 requires businesses to reclassify many independent contractors as employees, with several exceptions. How an individual is classified under this new law will greatly affect their legal options in a discrimination lawsuit.

Difference Between Employee and Independent Contractor in California

Employees are afforded protection under federal and state laws against acts of discrimination in the workplace. Other benefits for employees may include retirement benefits, workers’ compensation benefits, certain minimum wage requirements, and automatic deductions of payroll taxes. Independent contractors may not enjoy certain rights and benefits as official employees, but trade those benefits for the ability to work freely and have fewer restrictions.

Nonetheless, if you are subjected to blatant discrimination as an independent contractor, you may have protection under California’s Unruh Civil Rights Act which mandates that “[a]ll persons within the jurisdiction of this state are free and equal, and no matter what their sex, race, color, religion, ancestry, national origin, disability, medical condition, genetic information, marital status, sexual orientation, citizenship, primary language, or immigration status are entitled to the full and equal accommodations, advantages, facilities, privileges, or services in all business establishments of every kind whatsoever.”   The Unruh Civil Rights Act has been used to obtain protection for independent contractors experiencing discrimination in business relationships, but it does not apply to employment relationships.

Determining if you should be classified as an employee versus an independent contractor can be a complex legal undertaking. However, if you feel as if your employer has established a certain level of control over your work, your hours, and your assignments, you may actually be classified incorrectly. Employers can suffer severe legal consequences for misclassifying an employee as an independent contractor. The failure to classify a worker correctly can lead to serious financial liabilities for an employer, including paying back taxes, retroactive wages, and benefits for that employee.

If you feel you are being discriminated against for any reason in the workplace by your employer, and are classified as an independent contractor, you should visit with an experienced employment law attorney to help you determine your legal rights and your next steps.

Federal and State Anti-Discrimination Laws

Laws such as the Americans with Disabilities Act, the Family Medical Leave Act, the Civil Rights Act of 1964 or ADEA are only applicable to employees, not contract workers or independent contractors. Therefore, independent contractors will not find the protection against discrimination and harassment they seek at the federal level. There are some states that have extended discrimination and harassment protections to independent contractors and determined that equal opportunity laws cover independent contractors. A full listing of state non-discrimination laws and policies for employees shows that the full protection for independent contractors is lacking at the state level as well as the federal level.

Section 1981 – Section 1981 of the Civil Rights Act of 1866 specifically prohibits any type of discrimination based on race, color or ethnicity when making or enforcing contracts. While much more narrow and limited in scope than the Civil Rights Act of 1964, courts have generally interpreted this section to apply in the employment context which includes at-will employees, as well as independent contractors.  This means that an independent contractor may use Section 1981 to sue for discrimination if they are a minority and have a contractual relationship with an employer.

The downside of this act is that it only affords protections to these certain classes of persons, and discrimination based upon sex, religion, age, disability, or genetic heredity would not be covered under Section 1981. Nevertheless, this is one possibility for those independent contractors facing discrimination based on their race, color or ethnicity to find monetary relief or recovery.

The State of California – The State of California, in recent years, has utilized unique avenues to attempt to allow independent contractors relief from discrimination in the workplace. The Ninth Circuit of Appeal ruled that an independent contractor may file a disability claim against an employer under the Rehabilitation Act. The Rehabilitation Act prohibits any discrimination based on a disability in programs conducted by federal agencies, those receiving federal financial aid, or in federal employment. This ruling led to the Fifth Circuit and Tenth Circuits finding that the Rehabilitation Act should allow independent contractors to sue on the basis of employment discrimination, under specific circumstances.

Until the Supreme Court of California rules otherwise, currently independent contractors that fit a specific criteria may be able to bring disability discrimination lawsuits against federal contractors in the Fifth, Ninth and Tenth Circuit courts, even though the Americans with Disability Act would prohibit these types of cases.

AB5 and the Future for Independent Contractors in California. – A recent California law called AB5 has been the talk of the nation, as it requires many businesses who work with independent contractors to reclassify them as W2 employees. Enacted as an attempt to protect independent contractors in the same ways that employees receive protection from employment discrimination, and provide contractors with many benefits they were previously not entitled to under the law, like health care benefits and overtime pay, the new law has received a lot of criticism from independent contractors themselves.

There are certain enumerated exceptions to the bill. If you work as an independent contractor in the State of California, you should contact an experienced employment attorney to understand whether your business and work falls under an exception to AB5 or whether your employer is required to classify you as an employee. Your options when dealing with discrimination may be greatly impacted by how you are classified under this new law.

Contact an Experienced Employment Attorney

The legal landscape allowing an independent contractor to file a lawsuit with their employer-based on discrimination is challenging and complex. With more and more independent contractors flooding the marketplace, the gig economy is literally transforming the workplace and employer-employee relations. Employment laws and discrimination laws are struggling to keep up, in many cases to the detriment of independent contractors and other contract workers.

If you feel you have been discriminated against in any way by an employer as an employee or as an independent contractor, you may have the right to file a claim for compensation. If you have any questions about your rights under either federal or state law, contact the experienced labor and employment attorneys at V. James DeSimone Law at 310-693-5561 to help you learn about your legal rights, and help you determine if you have a strong case for a discrimination lawsuit.

V. James DeSimone

Attorney V. James DeSimone is a 35+ year experienced civil rights & employment lawyer in Southern California. Jim is a Super Lawyer, Rated “Superb” by Avvo, and is a US News & World Report Best Law Firm in California.