California Court Case Could Have Implications for Colorado Workers

With all of the distractions of the 2018 legislative session, Colorado’s policymakers may have missed an important court case in California. The decision could have major implications for Coloradans and portend a shift in how workers are treated in the new economy.

The case, Dynamex Operations West, Inc. v The Superior Court of Los Angeles County, presents some thorny questions on how companies should classify workers — mainly, should they be employees or not? The Bell Policy Center is looking at these issues closely, and there was even a piece of legislation in Colorado on this exact topic. Essentially, the California State Supreme Court’s decision in this particular case is a win for workers, as it determined most workers should be classified as employees.  

However, workers are clearly now at the mercy of judicial interpretations of laws put in place decades ago. While this court decision is positive for workers, the next one might not be. The fact that’s currently up to the courts makes it clear policymakers should be putting structures in place to protect workers from any decision that might not be so friendly. That was the case here in Colorado just four years ago when the Colorado Supreme Court handed down a ruling that was friendlier to businesses in classifying workers. These two related cases with very different outcomes is telling; court decisions concerning the future of work are fragile and must be handled with care.  

These classification clarifications are important and go to the heart of the current social safety net. If you are an employee, there are many more benefits and protections afforded by a business. Any health care, sick and family leave, retirement, and unemployment benefits offered at jobs are all contingent on being an employee. If you’re not, those benefits aren’t offered, and neither are anti-discrimination protections. While the California court ruling makes it harder for businesses to classify workers as independent contractors, the old Colorado case went the other direction. Which case will act as precedent as we move closer to the future of work? 

Policymakers should be exploring ways to ensure all workers, employees or not, have access to vital benefits. Not only would attaching benefits to the individual and not the job benefit independent contractors, but it would also help employees whose businesses don’t offer benefits to any workers. This would mean portable benefits systems across the state.  

We should also be strengthening protections for all workers, and not just those who classify as employees. We should be looking at how these changes should be reflected in education and vocational trainings. We should be taking a holistic look with experts and stakeholders on what other changes need to be made to keep pace with these massive shifts. 

With more workers becoming independent contractors — between February 2005 and late 2015, independent contractors and freelancers rose from 10.7 percent of the workforce to 15.8 percent — an increasing number of people need answers. That’s why it is up to policymakers to put structures in place to help workers, regardless of employee status. Our social safety net — and laws that govern work — need an update, and it needs to be done in a way that protects workers from being left out.