If you’re a worker in California, you need to know the ABC test most likely applies to you. It’s a test that determines whether you’re an employee or an independent contractor – and that distinction plays a big role in the way your employer pays you and the benefits you’re entitled to receive.
The ABC test is a test that determines whether you’re an employee or an independent contractor under California Labor Code, the Unemployment Insurance Code, the Industrial Welfare Commission wage orders. It’s required under Assembly Bill 5, which Gov. Gavin Newsom signed into law in September 2019.
If your employer shows these three things, you’re considered an independent contractor:
If your employer cannot show those three things, you’re an employee of the company and are entitled to the same benefits that employees receive.
Related: What happens if an employer intentionally misclassifies you as an employee?
Independent contractors and employees are entitled to different rights and benefits under California law. The following table outlines the differences between the two.
Employee | Independent Contractor |
Covered by federal and state employment and labor laws | Not covered by employment and labor laws |
Employer withholds taxes from pay | Pays own taxes |
Employer reports information for state and federal unemployment insurance; can draw unemployment in some cases | No reporting; ineligible for unemployment insurance payments in most cases |
Earns an hourly rate or salary | May earn a set fee for a project, hourly or daily pay, weekly pay or monthly pay |
The Borello Test, established by the California Supreme Court in 1989, is sometimes used to determine whether an employer has control over the manner and means of an employee’s work. It considers:
There are other factors, as well. However, the Borello Test may not ever be necessary if the ABC test can determine whether a worker is an employee or independent contractor.
Related: What can you do if you’re a misclassified employee?
If you suspect your employer has misclassified you as an employee or independent contractor, we may be able to help you. Call our office at 818-230-8380 or fill out the form below to schedule a free consultation with an experienced and knowledgeable attorney. You may be entitled to benefits or additional compensation.
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