Fillable Printable Info. Sheet: Casual Labor (De 231K)

Info. Sheet: Casual Labor (De 231K)

DE 231K Rev. 9 (6-11) (INTERNET) Page 1 of 3 CU

CASUAL LABOR

Casual labor is a common term used in the employer

community to describe workers performing a variety

of services, usually on a temporary or part-time basis.

Often these workers are hired for just an hour, a day, or

a week. Workers hired for an hour, a day, a week, or for

part-time services are typically common law employees.

There is no provision in the law that excludes a worker

from employment solely because he or she works less

than full-time. The following types of workers have been

referred to as causal laborers:

• Part-time helper • Temporary helper

• Day laborer • Outside laborer

• Student • Alien

• A worker on probation • A worker in training

• Aretireecollectingsocialsecuritybenets

• A worker without a social security number

WHO IS AN EMPLOYER?

Under Section 135 of the California Unemployment

Insurance Code (CUIC), an employing unit is any

individual or type of organization that has in its employ

one or more individuals performing services for it.

Under Section 675 of the CUIC, an employing unit

becomes an employer when it employs one or more

employees and pays wages in excess of $100 during

any calendar quarter. Wages consist of remuneration for

personal services performed, including cash payments,

commissions, bonuses, and the reasonable cash value

of nonmonetary payments for services, such as meals

and lodging.

Once you become an employer, you must complete a

registration form from the DE 1 series. Employers are

responsible for reporting wages paid to their employees

and paying Unemployment Insurance (UI) and

Employment Training Tax (ETT) on those wages, as well

as withholding and remitting State Disability Insurance*

(SDI) and Personal Income Tax (PIT) due on wages paid.

WHO IS AN EMPLOYEE?

An “employee” includes all of the following:

• Anyofcerofacorporation.

• Any worker who is an employee under the usual

common law rules.

* Includes Paid Family Leave (PFL).

• Anyworkerwhoseservicesarespecicallycovered

by law. (Refer to Information Sheet: Statutory

Employees [DE 231SE].)

Who Is a Common Law Employee?

Whether an individual is an employee for the purpose

of Section 621(b) of the CUIC will be determined by the

usual common law rules applicable in determining an

employer-employee relationship. To determine whether

one performs services for another as an employee,

the most important factor is the right of the principal

to control the manner and means of accomplishing

a desired result. The right to control, whether or not

exercised, is the most important factor in determining

the relationship. The right to discharge a worker at will

and without cause is strong evidence of the right to

control. Other factors to take into consideration are:

1) Whether or not the one performing the services is

engaged in a separately established occupation

or business.

2) The kind of occupation, with reference to whether,

in the locality, the work is usually done under the

direction of a principal without supervision.

3) The skill required in performing the services and

accomplishing the desired result.

4) Whether the principal or the person providing the

services supplies the instrumentalities, tools, and

the place of work for the person doing the work.

5) The length of time for which the services are

performed to determine whether the performance is

an isolated event or continuous in nature.

6) The method of payment, whether by the time, a

piece rate, or by the job.

7) Whether or not the work is part of the regular

business of the principal, or whether the work is not

within the regular business of the principal.

8) Whether or not the parties believe they are creating

the relationship of employer and employee.

9) The extent of actual control exercised by the principal

over the manner and means of performing the

services.

DE 231K Rev. 9 (6-11) (INTERNET) Page 2 of 3 CU

10) Whether the principal is or is not engaged in a

business enterprise or whether the services being

performedareforthebenetorconvenienceofthe

principal as an individual.

Another consideration relative to employment is whether

or not the worker can make business decisions that

wouldenablehimorhertoearnaprotorincura

nancialloss.Investmentoftheworker’stimeisnot

sufcienttoshowariskofloss.

The numbered factors above are evidence of the right to

control. These factors are described more fully in Section

4304-1 of Title 22, California Code of Regulations (CCR).

A determination of whether an individual is an employee

willdependuponagroupingoffactorsthataresignicant

in relation to the service being performed, rather than

depending on a single controlling factor.

The courts and the California Unemployment Insurance

Appeals Board (CUIAB) have held that the existence of a

written contract is not, by itself, a determining factor. The

actual practices of the parties in a relationship are more

important than the wording of a contract in determining

whether a worker is an employee or independent contractor.

WAGES

The employee performing casual labor services may

be paid based on piece rate or by the job, as well as

by hour, salary, or sales. The methods of payment may

include, but are not limited to, cash, check, meals,

lodging, products or services, and the reasonable cash

value of all remuneration in any medium other than cash.

However, wages do not include payment in any medium

other than cash to an employee for service not in the

courseoftheemployer’stradeorbusiness,exceptfor

domestic services in a private home or in a local college

club or local chapter of a college fraternity or sorority.

WHEN WOULD THE SERVICES REFERRED TO AS

CASUAL LABOR BE EXCLUDED FROM

EMPLOYMENT?

1. Under Section 640 of the CUIC, services not in

the course of the employing unit’s trade or

business performed in any calendar quarter would

be excluded UNLESS:

• The remuneration received for services is $50 or

AND

• The services (which are not in the course of

theemployingunit’stradeorbusiness)are

performed by the individual for some portion of

a day on each of some 24 days during either

the current calendar quarter or the preceding

calendar quarter.

Example: An individual worked 15 days and

waspaid$150intherstquarterof2010.

(Not subject as time factor was not met.)

This same individual worked 26 days and

was paid $400 in the second quarter of 2010.

(Subject as time and monetary requirements

weremet.)Thisindividualthenworkedve

days and was paid $65 in the third quarter of

2010. (Subject as time requirement was met

in the preceding quarter and the monetary

requirement was met in the third quarter of

2010.)

2. Services performed by an employee that are

in the course of the employing unit’s trade

or business would be considered employment

regardless of the amount of remuneration

received or the length of the services. However,

under Section 641 of the CUIC, services

performed in any calendar quarter in the employ

of any organization that is exempt from federal

incometaxes,suchasnonprotorganizations

and farmer cooperative organizations, would be

excluded if the remuneration for such services is

less than $50.

Any services performed in the course of the

employer’stradeorbusinessarepresumed

to be employment unless found to be an

independent contractor under common law.

“Servicenotinthecourseoftheemployingunit’s

trade or business” means service which does not,

in any way, promote, advance or further the trade or

business of the employing unit, and in no way tends

toward the preservation, maintenance or operation

of its business, business premises or business

property. “Trade or business” includes any business

or professional undertaking irrespective of its size

or scope without regard to the principal trade or

business of the employing unit. Refer to Section

640-1 of Title 22, CCR.

OTHER EXAMPLES

The CUIAB has previously considered the status

of workers performing casual labor services. The

following are examples of cases where the CUIAB

has held that individuals performing services in the

courseoftheemployingunit’stradeorbusinessand

referred to as casual labor are employees and not

independent contractors.

(1) A company providing telephone book delivery

services to its clients engaged the services of

part-time workers to deliver the phone books.

The part-time workers performed their services

under the following circumstances:

DE 231K Rev. 9 (6-11) (INTERNET) Page 3 of 3 CU

• The service provided by the workers was an

integral part of the business.

• The workers were not in business for

themselves.

• The fee and the delivery route were

established by the company.

• The service provided by the workers was

unskilled. The company trained the workers.

• The company supervised the workers through

the quality controller.

• The company set the hours in which the

deliveries were to be made and the overall

timeframe for the completion of the routes.

The company retained the right to control

the manner and the means of the work to be

accomplished. It was found that the part-time

workers were common law employees.

(2) Alawrmengagedtheservicesofclerks,lingclerks,

temporary secretaries, legal secretaries, investigators,

attorneys, and law clerks on a part-time basis and as-

needed basis under the following circumstances:

• All the services were an integral part of the law

business.

• Those who performed the same or similar

services on a full-time basis were treated as

 employeesbythelawrm.

• None of the workers held a business license.

• All the workers were under the supervision

 andcontrolofthelawrmandtheworktobe 

 performedwasassignedbythelawrm.

• Substantially all of the work was performed at

 thelawrm’splaceofbusiness.

• Each worker was subject to “at will” termination

without cause and without further liability on the

part of either party.

Theevidencesupportedthendingthatallthe

workers performed services as common law

employees.

The above-mentioned cases may not encompass the

entire set of factors used by the CUIAB in establishing

an employee status and are presented here as examples

only. The Employment Development Department (EDD)

and the CUIAB will determine status on a case-by-case

basis by applying the applicable CUIC sections to the

specicfactsexistinginaparticularworkingrelationship.

ADDITIONAL INFORMATION

For further assistance, please contact the Taxpayer

Assistance Center at (888) 745-3886 or visit the

nearestEmploymentTaxOfcelistedintheCalifornia

Employer’s Guide (DE 44)andonEDD’sWebsiteat

www.edd.ca.gov/Ofce_Locator/. Additional

informationisalsoavailablethroughEDD’sno-fee

payroll tax seminars and online courses. View the in-

personandonlinecourseofferingsonEDD’sWebsiteat

www.edd.ca.gov/Payroll_Tax_Seminars/.

The following EDD resources are also available to help

determinethecorrectclassicationoftheworkers.

Employment Determination Guide (DE 38)

The guide asks a series of “Yes” or “No” questions

regarding the treatment of workers to help determine if

a worker is most likely an employee or an independent

contractor and whether you need to seek additional

guidance.Toobtainthisguide,accessEDD’sWebsite

at www.edd.ca.gov/pdf_pub_ctr/de38.pdf.

Determination of Employment Work Status for

Purposes of California Employment Taxes and

Personal Income Tax Withholding (DE 1870)

The form provides a series of questions regarding

the working relationship between the principal and

the workers. After the form has been completed and

returned, EDD will issue a written determination stating

whether the workers are employees or independent

contractors based on the facts provided. To obtain this

form,accessEDD’sWebsiteat

www.edd.ca.gov/pdf_pub_ctr/de1870.pdf.

The EDD is an equal opportunity employer/program.

Auxiliary aids and services are available upon request to

individuals with disabilities. Requests for services, aids,

and/or alternate formats need to be made by calling

(888) 745-3886 (voice) or TTY (800) 547-9565.

This information sheet is provided as a public service and is intended to provide nontechnical assistance. Every attempt has

been made to provide information that is consistent with the appropriate statutes, rules, and administrative and court decisions.

Any information that is inconsistent with the law, regulations, and administrative and court decisions is not binding on either the

Employment Development Department or the taxpayer. Any information provided is not intended to be legal, accounting, tax,

investment, or other professional advice.