Hello we have an person in CA that chose to be an indepedent contractor and be paid via 1099-MISC for our company. We paid him in 2005 and 2006 a nonemployee compensation. In Nov 2006, this individual resigned from our company (mutual). After the first of the year this person started emailing that he was requesting additional pay for accured vacation, year end bonus, and expenses to be retrained. We did not pay him. A few days ago, we received Notice of Claim and Conference from the State of CA labor Commissioner. We are to appear. I dont understand why we would have to appear because this person was not even a full time employee?

I dont understand why we would have to appear because this person was not even a full time employee? You have to appear because the State has ordered you to appear.

An individual's part-time or full-time work schedule is irrelevant. The only pertinent question is whether this person actually qualified for IC status, which is something that should have been determined before you ever agreed to employ him. It doesn't matter whether the person wanted to have IC status, it only matters whether he or she qualified under the law.

I suggest you consult with an employment attorney right away.

We are to appear. I dont understand why we would have to appear because this person was not even a full time employee?

You are going to have to demonstrate that this person was legitimately classified as an Independent Contractor.

Beth's advice is right on target. Get an employment lawyer. Soon.

I agree with the other two answers. You might want to read the following article. It will discusses some of the issues involved. This particular article is directed at IRS's view of worker's classification, not the State of California DLSE's view, but the rules are more similar then different. Worker classification is a function of certain legally defined rules, none of which involve employee choice or the number of hours worked in the week.

All workers are employees until and unless the employer can affirmitively support an "independant contractor" classification. The classification burden is always on the employer.

http://payroll-taxes.com/articles/art2.html