Business Law • Land Use • Wills & Trusts
Labor Board From Reclassifying Contractors as Emploees*
by
Dennis W. Chiu, Esq.
Founder
PRODIGY LAW
Dennis W. Chiu, Esq.
Founder
PRODIGY LAW
In California, the California State Labor Board has transmuted
contractors into employees, if the contractors are required to assign
all work product as a "work made for hire", and found it to be a
violation of California Labor Code Section 3351.5(c) and California
Unemployment Insurance Code Sections 621(d) & 686.
Contractors or any non-employee working for your business, who is subject to a "work made for hire" clause, may be reclassified as an "employee" for unemployment and disability insurance purposes.
California businesses would then be liable for failure to submit payroll deductions for the contractor's unemployment and disability insurance, possibly including late fees.
Prodigy Law suggest that businesses require all employees to sign a new Non-Disclosure Agreement that provides legal language to the same or greater extent as the following:
"contractor warrants and provides for all copyrightable works created during the scope of this Agreement, an exclusive, irrevocable, royalty-free, perpetual, non-expiring and fully paid license to [your business] with all right, title and interest worldwide, with rights to sublicense through multiple tiers of sublicensees, to distribute, reproduce, make derivative works of, publicly perform, and publicly display in any form or medium, whether now known or later developed, make, have made, use, sell, import and offer for sale".
Contractors or any non-employee working for your business, who is subject to a "work made for hire" clause, may be reclassified as an "employee" for unemployment and disability insurance purposes.
California businesses would then be liable for failure to submit payroll deductions for the contractor's unemployment and disability insurance, possibly including late fees.
Prodigy Law suggest that businesses require all employees to sign a new Non-Disclosure Agreement that provides legal language to the same or greater extent as the following:
"contractor warrants and provides for all copyrightable works created during the scope of this Agreement, an exclusive, irrevocable, royalty-free, perpetual, non-expiring and fully paid license to [your business] with all right, title and interest worldwide, with rights to sublicense through multiple tiers of sublicensees, to distribute, reproduce, make derivative works of, publicly perform, and publicly display in any form or medium, whether now known or later developed, make, have made, use, sell, import and offer for sale".
*PRODIGY LAW ARTICLES ARE CREATED BY DENNIS W. CHIU ARE FOR INFORMATIONAL AND EDUCATIONAL PURPOSES ONLY. ANY SUGGESTIONS CONTAINED IN THE ARTICLES IS ONLY THE GENERAL OPINION OF DENNIS W. CHIU. PRODIGY LAW ARTICLES ARE NOT WRITTEN WITH ANY SPECIFIC FACT PATTERN OR CASE IN MIND. THEY DO NOT REPLACE ORIGINAL LEGAL RESEARCH AND CONSULTATION WITH AN ATTORNEY REGARDING YOUR SPECIFIC MATTER OR CASE. PRODIGY LAW ARTICLES ARE PRESENTED "AS-IS", AND DO NOT GUARANTEE THE ACCURACY OF THE INFORMATION CONTAINED THEREIN, SINCE CASE LAW AND LAW CAN CHANGE RAPIDLY.
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