California Supreme Court and the ABCs of Independent Contractors

On April 30, 2018, the California Supreme Court issued long-awaited guidance on how to determine if a worker is an employee or an independent contractor. Workers will be defaulted to an employee classification unless all 3 of the ABCs are met and the burden will be on the employer to prove otherwise. If you have ANY independent contractors working with you, now is the time to review their classification and ensure that they are, in light of this guidance, independent contractors.

The ABC test says that a worker is considered an employee UNLESS the hiring entity establishes all 3 of the following:
A. the worker is free from the control and direction of the hirer in connection with the performance of the work, both in terms of contract and in terms of fact; AND

B. the worker performs work that is outside the usual course of the hiring entity’s business; AND

C. the worker is customarily engaged in independently established trade, occupation, or business of the same nature as the work performed for the hiring entity.