Pasadena Employee Misclassification Lawyer

An Individual Can Be Classified As an Independent Contractor If They Meet the ABC Test

Assembly Bill (AB) 5 requires employers in California to use the ABC test to determine if you should be classified as an independent contractor. The requirements outlined in the ABC test can help you figure out if you’re misclassified as an independent contractor. 

The ABC test is made up of three questions, all of which must be answered in the affirmative for an employer to properly classify a worker as an independent contractor. The questions are as follows:

• Is the individual free from the control and direction of the company/employer when the individual is performing their work? 
• Is the individual performing work that is outside the usual course of the company’s business?
• Is the individual customarily engaged in an independently established trade of the same nature as the work the individual is performing?

Upon first glance, the ABC test might seem confusing, and you could be uncertain whether or not, based on the circumstances of your employment, you would answer “yes” or “no” to the three questions. Fortunately, the California employee misclassification lawyers from Domb & Rauchwerger are here to break down each of the three questions that make up the ABC test.

Understanding Part A

To answer “yes” to part A (“Is the individual free from the control and direction of the company/employer when the individual is performing work?”), you must be free to choose how you want to accomplish a project, the hours you work, the tools you use, etc. It’s probably clear whether or not you’d answer “yes” to part A, as it’s fairly straightforward. That said, the following parts may require more explanation.

Understanding Part B

To satisfy part B (“the individual performing work that is outside the usual course of the company’s business?”), you cannot be engaged in the same line of work as the company for whom you are performing services. For example, if you are a plumber and a grocery store hires you to fix a leak in the bathroom, you are not performing work that the grocery store as a business generally performs, which means you do not satisfy part B. 

On the other hand, if you are a meat clerk at a grocery store, you’re in the same line of work that the grocery store is generally involved in, so you would answer “no” to Part B of the test.  In this situation, if the grocery store attempted to classify you as an independent contractor, it would be a misclassification and illegal.

Similarly, let’s say there is a company that makes and sells widgets and they hire an independent contractor to sell their widgets to other companies.  In such a situation, this would very likely be a misclassification because both the company and the individual are involved in the sale of widgets.    

Understanding Part C

Part C of the test (“Is the individual customarily engaged in an independently established trade of the same nature as the work the individual is performing?”) focuses on whether you hold yourself out as an independently established business. Using the grocery store example, imagine again that you’re a janitor who only provides cleaning services to the grocery store.

In this hypothetical situation, you don’t perform janitorial work for others and don’t advertise yourself as being available to provide janitorial work for others. In this scenario, you would answer “no” to part C of the test. As a result, you would have to be classified as an employee of the grocery store, even if you answered “yes” to part B. 

On the other hand, if you provide your janitorial services to many different companies and/or if you hold yourself out as available for hire to different companies, you would likely answer “yes” to part C of the test. 

What Your Answers to the ABC Test Mean

If you answer “no” to any of the ABC test questions, you should probably be classified as an employee. You likely should be classified as an independent contractor if you answered “yes” to all three questions. 

If you realize that your ABC test result doesn’t match your current classification, we encourage you to meet with an employee misclassification attorney from California, as you may be entitled to remedies, such as compensation and penalties. However, you might not have grounds for a claim if one of the exceptions mentioned below applies to your situation.

ABC Test Exceptions

The California legislature created several exceptions for certain industries where a company does not have to meet the ABC test’s requirements in order to properly classify an individual as an independent contractor. 

For those industries/professions exempted, a different and less rigid test applies. The industries/professions that are exempt from the ABC test include, but are not limited to: 

Each of these exceptions has their own unique requirements, so it is important that you speak with our California employee misclassification attorneys if you believe that you have not been properly classified as an independent contractor by an entity. 

Employers and Individuals Can’t Contract Around ABC Test Results

According to the law, you and a company cannot contract around the classification determined by the ABC test.

In other words, even if you want to be classified as an independent contractor or sign an agreement stating that you are an independent contractor, you still must be classified as an employee unless you pass the ABC test or fall into one of the exceptions listed above.

Protect your rights – call (213) 772-5882 to connect with our dedicated legal team today.