From the Hotline: Contracting Employees and Paid Leave

Question:  Is an independent contractor in California entitled to paid time off from the company he’s doing work with for the birth of a child?

Answer: If accurately classified, an independent contractor does not qualify for many of the benefits and requirements provided by federal and state employment laws for regular employees of a company because that contractor is NOT an employee of the contracting company. The direct answer to the question is that the employer with whom the independent contractor has the agreement is NOT required to provide any type of paid leave or any form of health or wage replacement benefit.

Typically, the list that follows are the areas where an independent contractor is NOT covered by the company s/he is under contract to  work for because the underlying assumption is that the contractor has his/her own business liability insurance, pays his/her own taxes and handles his/her own benefits:

  • Not entitled to unemployment insurance, state disability insurance or California Paid Family Leave from the contracting entity/employer;
  • Excluded from coverage under the National Labor Relations Act and WARN Act (plant closing);
  • Excluded from state and federal wage and hour laws;
  • Excluded from Cal/OSHA and federal OSHA and Worker’s Compensation;
  • Employing entity does not deduct employment taxes and does NOT have to cover the contractor for employer benefits or liability insurance;
  • Excluded by many of the federal and state nondiscrimination laws and wage and hour laws; and
  • Are not employees subject to the immigration reform law (IRCA) – no I-9 verification required.

According to California’s EDD program provisions, self-employed individuals may only elect SDI coverage for themselves and not for family members.  For more information, visit: http://www.edd.ca.gov/Unemployment/New_Automated_and_Online_Services.htm.