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.
Signed into law in 2019, California Assembly Bill 5 (AB5) established the ABC test to determine whether a worker is an employee or an independent contractor. Under this test, a worker is presumed to be an employee unless the employer can prove all three conditions:
- A – Autonomy: The worker is free from the control and direction of the hiring entity, both in contract and practice.
- B – Business Scope: The work performed is outside the usual course of the hiring entity’s business. Workers performing core business functions are generally considered employees.
- C – Customary Trade: The worker is independently established in their trade or occupation, such as running their own business or having multiple clients.
Failing even one of these criteria usually means the worker should be classified as an employee under California law, entitling them to full protections like minimum wage, overtime, and paid leave.
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
YYou may be misclassified as an independent contractor if any of the following apply:
- You are paid a flat rate or per job, rather than hourly.
- Your employer controls your schedule, tools, or work methods.
- You perform work that is core to the business.
- You are required to wear a uniform or display a company logo.
- You are treated like a regular employee despite a “contractor” label.
Even if you signed a contract calling you a “contractor,” California law looks at how you are treated in practice. Misclassification can mean you’re entitled to back pay, benefits, and protections under AB5.
Your Legal Rights If You’ve Been Misclassified
Your Legal Rights as a Misclassified Worker in California
If AB5 applies and you are misclassified as a contractor, you may be entitled to significant financial recovery and employee protections, including:
- Back pay for unpaid wages and overtime
- Premium pay for missed meal or rest breaks
- Reimbursement for work-related expenses, such as tools, mileage, or phone use
- Waiting time penalties if your final paycheck was delayed
- Workers’ compensation benefits if injured on the job
To recover these benefits, you can file a wage claim with the California Department of Labor Standards Enforcement (DLSE). Most workers have up to three years to file, but acting promptly ensures important evidence is preserved.
How an Employment Lawyer Can Help
Navigating AB5 misclassification can be complex, especially if your employer disputes your status. An experienced California employment lawyer can:
- Review your work conditions and determine if you’ve been misclassified
- Calculate wages, penalties, and benefits you may be owed under AB5
- Assist in filing a wage claim or lawsuit
- Represent you in negotiations, hearings, or court proceedings
At Bibiyan Law Group, our attorneys have helped California workers recover millions in unpaid wages, overtime, and penalties. Acting quickly is critical to protect your rights and maximize recovery.
Frequently Asked Questions
1. What is AB5 in California?
AB5 is a California law that sets the standard for determining whether a worker is an employee or an independent contractor. It uses the ABC test, which assumes you are an employee unless your employer proves all three parts of the test. This law was created to stop widespread misclassification and ensure workers receive proper wages and benefits.
2. Can I be a contractor if I only work for one company?
Probably not, because working exclusively for one company usually indicates employee status under the ABC test. True independent contractors typically have multiple clients and more control over their work. If you’re tied to one employer’s schedule and methods, you’re likely entitled to employee protections.
3. Do I need to sign a contract to be an employee?
No, your legal status does not depend on whether you signed a contract. What really matters is how you are treated in practice, such as whether your employer controls your hours, pay, and job duties. Even if you signed paperwork calling you a contractor, you may still be an employee under California law.
4. How long do I have to file a misclassification claim?
In most cases, you have up to three years to file a wage claim for misclassification in California. This deadline covers back pay, overtime, and other unpaid benefits you may be owed. However, acting quickly is important to preserve evidence and increase your chances of success.
5. Will I get in trouble for filing a claim?
No, it is illegal for an employer to retaliate against you for asserting your rights under California law. Retaliation can include firing, demotion, or harassment, and workers are protected from these actions. If your employer does try to punish you for filing a claim, you may have an additional legal case for retaliation.
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.