California’s top court clarifies independent contractor vs. employee for employers

California’s top court clarifies independent contractor vs. employee for employers

On April 30, 2018, the California Supreme Court issued its long-awaited opinion in Dynamex Operations West, Inc. v. Superior Court, clarifying the standard for determining whether workers in California should be classified as employees or as independent contractors for purposes of the wage orders adopted by California’s Industrial Welfare Commission (“IWC”).

The Court held that there is a presumption that individuals are employees, and that an entity classifying an individual as an independent contractor bears the burden of establishing that such a classification is proper under the “ABC test” used in some other jurisdictions.

To meet this burden, the hiring entity must establish each of the following three factors, commonly known as the “ABC Test”:

(A) that the worker is free from the control and direction of the hiring entity in connection with the performance of the work, both under the contract for the performance of the work and in fact; and

(B) that the worker performs work that is outside the usual course of the hiring entity’s business; and

(C) that the worker is customarily engaged in an independently established trade, occupation, or business of the same nature as the work performed.

Fail just one part, and the worker is an employee under California wage and hour law. This new test is even stricter than most other states’ “ABC Tests”, which usually include two ways that Part B can be satisfied.

California employers will now need to reevaluate the way they treat independent contractors under the “ABC Test” to determine whether any or all such workers should be reclassified.

2018 Business Tax Deadlines for 2017 Tax Filing

2018 Business Tax Deadlines for 2017 Tax Filing

2018 Business Tax Deadlines for 2017 Tax Filing

Your business’s tax return deadline is based on its entity type, whether or not you plan on filing an extension, and if there are any weekend or federal holidays in the picture.

The table below details when each type of business entity needs to file 2017 taxes in 2018 (using the calendar year)

 Entity Type Tax Deadline Due Date
Original deadline for partnerships (Form 1065) and S Corporations (Form 1120S) March 15, 2018
Original deadline for C Corporations (Form 1120) and individuals (Form 1040) April 17, 2018
Original deadline for exempt organizations (Form 990) May 15, 2018
Final deadline for partnerships and S Corporations (with extension) September 17, 2018
Final deadline for C Corporations and individuals (with extension) October 15, 2018
Final deadline for exempt organizations (with extension) August 15, 2018

 

Typically, the tax return due date for flow-through entities is the fifteenth day of the third month of the company’s fiscal year. So the S Corporation and LLC tax return due date in 2018 will fall on March 15 (for partnerships that follow the calendar year). The extended due date for flow-through taxes will be September 17, 2018.