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February 1, 2019

California Law has made it Virtually Mandatory for Independent Contractors to Receive the Same Treatment and Benefits as Full-Time Employees

The ruling so rocked the state’s business community that the California Chamber of Commerce and scores of affected businesses, including some of the state’s largest tech companies, made a concerted effort to seek legislative redress during the final two weeks of the 2018 legislative session. Organized labor’s firm opposition blunted that effort. However, as the 2019 legislative period opened for business California’s Capitol Sacramento was abuzz with talk of legislation to blunt the effects of what many Democratic labor leaning legislators were openly calling overreach.

The case didn’t “rock” the golf community, but it did pose serious challenges to some of the game’s normative practices, particularly with respect to PGA Teaching Professionals. Taken verbatim from the ruling, here is the new test the court created for determining whether one is an employee or an independent contractor, or the “ABC test” as the court termed it:

“The ABC test presumptively considers all workers to be employees, and permits workers to be classified as independent contractors only if the hiring business demonstrates that the worker in question satisfies each of three conditions: (a) that the worker is free from the control and direction of the hirer 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 that involved in the work performed.” [Dynamex Operations West, Inc., v. Superior Court of Los Angeles County]

The burden of rebutting the firmly stated presumption of “employee” status falls to the employer, and the burden can only be sustained if ALL three of the “satisfying” questions can be answered in the affirmative. It’s not hard to see that the second of the questions – does the worker perform work that is outside the usual course of the hiring entity’s business – poses a big problem for the many PGA Teaching Professionals that really are and in many cases, prefer, working as independent agents. It also poses a problem for general managers of private clubs/daily-fee facilities and managers of municipal facilities that have created two classes of PGA Professional at their properties – one for those whose duties are mixed (employees) and another (independent contractor) whose duties are exclusive to teaching.

It’s clear that unless the California golf community can secure some small measure of legislative relief, the state’s teaching professionals are going to be working as employees whether they want to or not, and many golf courses are going to have to change their business models whether it makes sense or not.

So, what are the prospects for securing the requisite relief? Based on preliminary conversations with sympathetic Democratic legislators, the golf professionals’ situation may be amenable to a narrow carve out based upon a contractual or landlord/tenant relationship between teaching professional and golf course management/ownership. Yes, it’s impossible to classify the teaching of golf at a golf course as anything other than work that is within the usual course of the hiring entity’s business. However, to the extent which teaching golf is a function of the teacher’s very specific professional expertise and the landlord golf course nothing more than a generic site for the exercise of that professional expertise, there would seem to be room for giving precedence to the expertise over the site, or the contents over the container as it were.

Wish the California golf community well. What starts in California moves eastward.