An appellate court recently ruled on a case in which newspaper carriers were suing for mileage reimbursement from a newspaper. A trial court had ruled in favor of the defendants agreeing with the defendant’s claim that the newspaper carriers were independent contractors and thus not entitled to be reimbursed for mileage expenses. 

The carriers had signed a contract with a newspaper company in which they agreed that they would set their own hours, buy their own supplies, provide their own transportation, that they were not subject to the newspaper company’s rules and regulations, and they could work for other companies. However, the appellate court determined that the trial court had not used the correct test to determine whether or not the newspaper carriers were independent contractors. 

The appellate court noticed that the trial court had used the Employment Development Department (EDD) regulations when deciding whether or not the carriers should be classified as independent contractors. This was an error because although these regulations do have criteria for determining whether or not a worker is an employee or independent contractor, the regulations are for use in unemployment claims and do not apply to the carrier’s claims. 

The court ruled that the Borello Test should be used in this case and sent the case back to the lower court to be decided using this test. This test considers whether the worker or the organization or person hiring the workers controls the work. It also considers some other factors, such as:

• If the worker buys their own supplies
• Whether the person doing the work is in a particular occupation
• How long the person will be providing the service
• Whether the worker is being paid by the time or by the job

The court should consider all of these factors without any one factor being the deciding issue. The court did acknowledge that the legislature and high court have started using the “ABC” test to determine whether a company is an employer when determining if the California Wage Act applies. This act covers overtime, meal and rest breaks, and wages, but not reimbursements. Under this act, a worker is an employee unless the person or organization hiring them shows that:

• The worker is not controlled by the entity hiring them in their contract or in reality
• The worker is engaging in work that is not part of the normal business for the hiring entity
• The worker typically operates as an independent contractor doing the same type of work they are doing for the hiring entity

However, the court stated that newspaper carriers are an exception to “ABC” test until January 1, 2022. Therefore, the court stated that whether or not the worker is an employee or independent contractor should be determined by the lower court using the Borello test.