Are you being told you’re a contractor, but treated like an employee? In California, how you’re classified matters. Your classification affects whether you’re legally entitled to overtime pay, meal and rest breaks, workers’ compensation, unemployment insurance, and more.

Thanks to Assembly Bill 5 (AB5), thousands of workers in California who were previously labeled as “independent contractors” are now recognized as employees under state labor law, granting them powerful legal protections.

If you’re unsure whether you’re being misclassified, this guide will help you understand:

  • The difference between contractors and employees under California law
  • How AB5 and the ABC Test apply to your job
  • Your rights if you’ve been misclassified
  • How to recover back wages and protect your future

Why Employment Classification Matters in 2025

Misclassification is one of the most common ways employers violate California labor law. When workers are wrongly classified as contractors, they lose:

  • Minimum wage and overtime pay
  • Rest and meal breaks
  • Reimbursement for job expenses
  • Paid sick leave and unemployment benefits
  • Health and safety protections under Cal/OSHA

In industries such as delivery, janitorial, gig work, and construction, many employers classify workers as “1099 contractors” to avoid paying what is legally owed.

According to the California Labor Commissioner, such misclassification can result in thousands of dollars in unpaid wages and penalties for the employer.

Understanding AB5 and the ABC Test

Signed into law in 2019, AB5 established the “ABC test” as the standard for determining employment classification in California.

Under this test, a worker is presumed to be an employee unless the hiring entity can prove all three parts of the test:

  • First, the worker must be free from the control and direction of the hiring entity, both under contract and in actual practice.
  • Second, the work performed must fall outside the usual course of the hiring entity’s business, meaning the worker should not be doing the core functions of the company.
  • Third, the worker must be independently established in their trade or occupation, such as running their own business or having multiple clients.

Failing to meet even one of these conditions means the worker should legally be classified as an employee and entitled to the full protections and benefits under California labor law.

Example:

  • A delivery driver working for a food app who follows set shifts and routes? Probably an employee under AB5.
  • A freelance web designer who works for multiple clients and sets their hours? Likely a trustworthy contractor.

If your job fails any of the ABC points, you may be misclassified.

Real Example: When a Contractor Is Actually an Employee

Veronica was hired to clean office buildings. Her boss said she was a “contractor,” but he controlled when she worked, how long she worked, what she wore, and what tasks she performed. He paid her a flat daily rate below minimum wage and gave her no overtime or breaks.

Veronica filed a claim with the Labor Commissioner and recovered several thousand dollars in unpaid wages and penalties. The employer was fined for misclassification, failure to provide workers’ compensation, and wage theft.

This is a typical scenario, according to the California Department of Industrial Relations.

Signs You May Be Misclassified

You might be misclassified if:

  • You’re paid a flat rate or by the job, not hourly
  • Your employer controls your schedule, tools, and methods
  • You do work that is core to the business
  • You’re required to wear a uniform or display a company logo
  • You don’t invoice, or you’re paid like regular employees

Even if you signed a contract calling you a “contractor,” you may still be an employee under the law.

Your Legal Rights If You’ve Been Misclassified

If AB5 applies to your situation and you’ve been misclassified, you may be entitled to significant financial recovery and critical protections. For example, workers in this position can typically claim back pay for any unpaid overtime and minimum wage violations. If you weren’t provided proper meals or rest breaks, you may also be owed premium payments for each violation.

Additionally, California law requires that employees be reimbursed for necessary work expenses. So, if you had to cover your tools, supplies, mileage, or phone usage, you could be entitled to compensation. In cases where employers delayed issuing your final paycheck after separation, you might qualify for waiting time penalties, which can add up quickly. And if you were injured on the job while misclassified, you may be eligible for workers’ compensation benefits to cover medical care and lost wages.

To begin the process of reclaiming what you’re owed, you can file a wage claim through the California DLSE. Most workers have up to three years to file a claim, but acting sooner improves your chances of success and ensures critical evidence isn’t lost.

How an Employment Lawyer Can Help

Navigating AB5 employment classification can be complex, especially if your employer pushes back. That’s where having an experienced employment attorney becomes critical. A skilled lawyer doesn’t just clarify your classification; they help you build a strong legal case for recovering what you’re owed.

An employment attorney from Bibiyan Law Group can review your working conditions to determine if you’ve been misclassified. If so, they can estimate the wages and penalties you’re entitled to under California law, assist you in filing a wage claim or even a lawsuit, and represent you during negotiations or court proceedings. Their goal is to make sure you’re treated relatively under the law.

If you’re unsure about your status or rights, don’t go it alone. Bibiyan Law Group is here to help California workers fight back against misclassification and wage theft.

Speak With a Misclassification Lawyer at Bibiyan Law

If you believe you’ve been misclassified as an independent contractor, now is the time to take action. Delays could cost you valuable rights and hard-earned wages. At Bibiyan Law Group, we understand the urgency and complexity of these cases, which is why we offer free, confidential consultations to help you know where you stand.

Our attorneys have successfully recovered millions of dollars in unpaid wages, overtime, and penalties for California workers who were unfairly denied employee status. We’re committed to standing up for your rights and holding employers accountable.

👉 Schedule your free case evaluation today, and let’s find out how we can help you move forward with strength.

Frequently Asked Questions

1. What is AB5 in California?

AB5 is a California law that codifies the ABC test for determining whether a worker is an employee or an independent contractor.

2. Can I be a contractor if I only work for one company?

Probably not. Under the ABC test, exclusivity is often a sign of employee status.

3. Do I need to sign a contract to be an employee?

No. Employment status depends on how you’re treated, not what your contract says.

4. How long do I have to file a misclassification claim?

Typically, three years for wage claims, but don’t delay.

5. Will I get in trouble for filing a claim?

No. It’s illegal for your employer to retaliate. You are protected under California law.

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