Independent Contractors & Workers’ Comp in LA

If you were injured at work in Los Angeles and your employer told you that you are an “independent contractor” and therefore not entitled to workers’ compensation benefits, do not accept that answer without speaking to an attorney first. In California, the legal definition of “employee” is deliberately broad — and many workers classified as independent contractors are actually employees under the law, entitled to the full range of workers’ compensation benefits.

This issue is especially prevalent in Los Angeles, where gig economy work, entertainment industry loan-out arrangements, last-mile delivery, rideshare driving, construction subcontracting, and staffing agency employment all blur the line between employee and contractor. Understanding where that line actually sits under California law can be the difference between receiving medical treatment and disability benefits or bearing those costs entirely on your own.

How California Law Defines “Employee” for Workers’ Comp Purposes

California uses a broad presumption in favor of employee status. Under California Labor Code Section 3357, any person rendering service for another is presumed to be an employee unless the hiring party can prove otherwise. This means the burden is on your employer to prove you are an independent contractor — not on you to prove you are an employee.

For workers’ compensation specifically, the test for employee status focuses on whether the hiring entity had the right to control how the work was performed — not just the result. If the company dictated your hours, assigned your routes, required you to use their equipment, set your rate of pay, or directed how you performed your tasks, you may be an employee regardless of what your contract says.

AB5 and the ABC Test

California’s Assembly Bill 5 (AB5), which took effect in January 2020, made it significantly harder for companies to classify workers as independent contractors. Under AB5, a worker is presumed to be an employee unless the hiring entity can prove all three prongs of the “ABC test”:

A — The worker is free from the control and direction of the hiring entity in connection with the performance of the work.
B — The worker performs work that is outside the usual course of the hiring entity’s business.
C — The worker is customarily engaged in an independently established trade, occupation, or business of the same nature as the work performed.

Prong B is where most misclassification claims succeed. If a delivery company classifies its drivers as contractors but delivery is the core of its business, it fails Prong B. If a production company classifies a grip as a contractor but film production is what the company does, it likely fails Prong B. Many Los Angeles employers fail this test and many misclassified workers don’t know it.

Industries in Los Angeles Where Misclassification Is Most Common

Gig and App-Based Work

Rideshare drivers, delivery workers, and on-demand service providers in Los Angeles have been at the center of the AB5 debate. While Proposition 22 (2020) carved out certain app-based companies from AB5, the legal landscape remains contested. If you were injured while performing a delivery or rideshare trip, the question of whether workers’ comp applies depends on how your relationship with the platform is legally characterized — a fact-specific determination that requires legal analysis.

Construction and Subcontracting

Construction subcontractors in Los Angeles are frequently misclassified. General contractors routinely label skilled tradespeople as independent contractors to avoid payroll taxes and workers’ comp premiums. If you were injured on a construction site in Los Angeles while working under a subcontract arrangement, an attorney can analyze whether you meet the legal definition of an employee and whether the general contractor, the subcontractor, or both carry liability for your injury.

Entertainment Industry Loan-Outs

Entertainment workers in Los Angeles frequently work through “loan-out” corporations — a structure where the individual worker incorporates and then “loans” their services to a production company. This arrangement is common for writers, directors, and higher-paid crew. The existence of a loan-out does not automatically mean you are not entitled to workers’ compensation. The actual conditions of the work relationship still govern, and many loan-out workers qualify as employees of the production company for workers’ comp purposes.

Staffing Agency Workers

If you were placed at a worksite by a staffing agency, you may have two potential employers: the agency and the client company where you actually worked. California Labor Code Section 3602 allows claims against both in certain circumstances. Staffing agency workers are generally entitled to workers’ compensation even when working on temporary or project-based assignments.

What to Do If You Were Injured and Told You Don’t Qualify

If your employer or the company you work for told you that you are an independent contractor and cannot file a workers’ compensation claim, take these steps:

Do not sign any documents waving your rights before speaking with an attorney.
Document the details of how your work relationship operated: who set your hours, who provided equipment, who directed your tasks, and how you were paid.
Preserve any contracts, app records, pay stubs, text messages, or emails that describe the working arrangement.
Contact a workers’ compensation attorney before the one-year filing deadline under California Labor Code Section 5405 passes.

The Law Offices of Reuben J. Felstiner has represented misclassified workers throughout Los Angeles and Southeast LA County for over 30 years. If you were injured at work and told you don’t qualify for workers’ comp, we will review your case at no cost and tell you honestly whether you have a claim. Visit our Los Angeles workers’ compensation page for more about how we represent LA workers, or call (310) 572-1664 for a free case review. We also serve workers in Inglewood and across Southern California. For a full overview of the California workers’ comp process, visit our workers’ compensation practice page.