1099 Misclassification: The ABC Test That Turns Contractors Into Employees

If your company controls your work, you probably were never a contractor — and misclassification means unpaid overtime, breaks, expenses, and penalties stacking in your favor.

What California Law Says

Under Labor Code section 2775 and the Dynamex ABC test, you are an employee unless the hirer proves all three prongs: freedom from control, work outside the company’s usual business, and an independently established trade. Willful misclassification carries civil penalties of 5,000 to 25,000 dollars per violation under section 226.8.

How to Fight Back, Step by Step

1. List the control factors: set schedule, required methods, company equipment, supervision, inability to work for others.
2. Identify everything an employee would have received: overtime, meal and rest premiums, expense reimbursement, pay stubs.
3. Reconstruct your hours and expenses across the claim period.
4. Send a demand recharacterizing the relationship and itemizing the unpaid amounts.
5. File with the Labor Commissioner; misclassification claims routinely produce multi-item awards.

Common Questions

I signed a contractor agreement. Am I stuck with it?

No. The label on the paper does not control — the actual working relationship does. Agreements that fail the ABC test are disregarded.

What about the self-employment taxes I paid?

Misclassified workers often overpaid payroll taxes; consult a tax professional about amended filings while pursuing wage recovery.