Courts apply the three-part “ABC” Test to determine whether a worker qualifies as an employee or an independent contractor in matters concerning wages and benefits. Under this test, a court evaluates whether the worker: (1) operates independently of the hiring entity’s control; (2) performs work outside the usual course of the hiring entity’s business; and (3) engages in an independently established trade, occupation, or business.
Additionally, the Labor Code requires employers to reimburse employees, but not independent contractors, for necessary expenditures incurred in the course of employment.
SB 809 clarifies that existing law does not consider ownership of a vehicle used to perform labor or services for compensation, whether personal or commercial, as determinative of a worker’s status as an independent contractor.
SB 809 further clarifies that the Labor Code provision requiring employers to reimburse employees for necessary work-related expenditures includes costs associated with the use of personal and commercial vehicles. In the context of construction trucking, SB 809 requires employers to reimburse employees who are commercial drivers and who own their trucks, tractors, or trailers for expenses related to use, maintenance, and depreciation.
Employers and employees who drive personal and commercial vehicles, or the labor union that represents such employees, must negotiate reimbursement rates. Such reimbursement rate may be established as either a flat rate or per-mile rate, but not less than either the actual expenses incurred by the employee or the standard mileage rate set by the Internal Revenue Service.
(SB 809 adds Sections 2750.9, 2775.5, and 2802.2 to the Labor Code.)