Expense Reimbursements
Independent Contractor Misclassifications for Nurses in California
In recent years, more and more nurses and other healthcare workers have been hired — or told they are being hired — as “independent contractors” instead of employees. On the surface, this might seem harmless. Some employers even suggest that working as an independent contractor gives employees more “flexibility” or “control” over their schedule.
But here’s the truth: if you’re under the control of a hospital, clinic, or staffing agency, you are likely an employee under California law — and misclassification as an independent contractor can cost you thousands of dollars in lost compensation and benefits.
At RN Counsel, we fight for nurses who have been misclassified, recovering back pay, overtime, expense reimbursements, and penalties. If your title says “independent contractor” but your job functions say “employee,” you may have a strong legal claim.
Why Misclassification Happens
Employers sometimes misclassify employees as independent contractors to:
- Avoid paying overtime
- Avoid providing benefits (health insurance, retirement, paid sick leave)
- Avoid covering payroll taxes
- Avoid reimbursing business expenses
- Reduce legal liability for workplace injuries or labor law violations
While this saves the employer money, it comes at your expense.
The ABC Test in California
California law, under Assembly Bill 5 (AB 5) and its later amendments (AB 2257), uses the ABC test to determine whether a worker is an employee or an independent contractor. To classify you as an independent contractor, all three of the following must be true:
You are free from the control and direction of the hiring entity in connection with the performance of your work, both under the contract and in fact.
You perform work that is outside the usual course of the hiring entity’s business.
You are customarily engaged in an independently established trade, occupation, or business of the same nature as the work performed.
For most nurses and healthcare workers:
- A fails because hospitals or clinics control your schedule, duties, and how you provide care.
- B fails because providing healthcare services is at the core of your employer’s business.
- C fails unless you truly operate your own business with multiple clients and your own business license.
If you fail even one of the ABC test criteria, you are an employee — not an independent contractor. Additionally, even if you signed a contract agreeing to work as an independent contractor, that contract is not enforceable if your employer can’t meet all of the elements of the ABC test.
Red Flags You May Be Misclassified
- You are required to wear the employer’s uniform or badge.
- You work under a fixed schedule set by the employer.
- You receive assignments directly from the employer’s supervisors.
- You use the employer’s equipment and facilities.
- You are prohibited from working for competitors during your contract.
- You are paid hourly (or per shift) rather than per project.
- You cannot subcontract your work to someone else.
If several of these apply, you are likely an employee under California law.
Why Misclassification Hurts Nurses
Being labeled as an independent contractor often means losing:
Overtime Pay
No time-and-a-half or double time, even if you work 12+ hour shifts
Meal and Rest Break Protections
No legally required breaks or penalties if missed.
Expense Reimbursements
You cover your own uniforms, equipment, mileage, and more.
Workers’ Compensation Coverage
No coverage for on-the-job injuries.
Unemployment Benefits
No access if your contract ends.
Paid Sick Leave
No accrual or legal right to use it.
Penalties for Misclassification
Under California law willfully misclassifying a worker can result in:
- Liability for back pay and benefits
- Payment of unpaid payroll taxes and insurance premiums
- Reimbursement of business expenses
- Legal fees and court costs for the worker
If the misclassification was widespread (affecting many employees), the case may qualify as a class action, increasing potential recovery.
Real-World Example: Nurse Misclassification by “Online Platform”
A nurse was hired by an “online platform” as an “independent contractor” to work per diem shifts, but:
- The nurse was paid by the online platform, not by the facility where she worked.
- The online platform had the right to discipline or terminate her for performance and attendance issues.
- She did not have her own established business.
Under California’s ABC test, she was clearly an employee. With legal representation, she recovered unpaid overtime, expense reimbursements, and penalties for missed breaks.
Steps to Take If You Suspect Misclassification
- Review Your Contract – Look for language about “independent contractor” status and job control.
- Compare Your Work to the ABC Test – If you fail even one part, you may be an employee.
- Document Your Work Conditions – Keep records of schedules, assignments, supervision, and control.
- Consult an Attorney – Misclassification cases require legal expertise to calculate back pay and benefits owed.
RN Counsel: Correcting Nurse Misclassification and Recovering Your Pay
At RN Counsel, we have seen how misclassification robs nurses and other healthcare workers of fair pay, benefits, and basic workplace protections. Our attorneys understand the healthcare industry, the tactics employers use, and how to prove you are an employee under the law.
When you choose RN Counsel, you get:
- Attorneys focused exclusively on protecting nurses
- Proven strategies to challenge misclassification and recover lost wages and benefits
- Aggressive legal advocacy to hold hospitals, clinics, and staffing agencies accountable
- No upfront fees — we only get paid if we win your case
If you have been classified as an independent contractor but perform the work of an employee, you may be entitled to substantial back pay, benefits, and penalties.
📞 Call RN Counsel today at (424) 252-4711 for a free, confidential consultation with one of our qualified attorneys. We’ll review your work arrangement, compare it to California’s legal standards, and take swift action to recover what’s rightfully yours.
FAQs: Independent Contractor Misclassifications for Nurses
Can I be an independent contractor if I work in a hospital?
In most cases, no — because nursing is part of the hospital’s core business.
What if I agreed to be an independent contractor?
Your legal rights cannot be waived by agreement if the classification is incorrect.
Does it matter if I get a 1099 instead of a W-2?
The tax form you receive does not determine your legal status.
Can I be both an independent contractor and an employee for the same employer?
Possibly, but only if the roles are completely different and meet the ABC test separately.
What’s the time limit for bringing a misclassification claim?
Generally, up to 3 years for wage claims, or 4 years if also pursuing unfair competition claims.