We’ve been waiting for more than a year to hear more information about independent contractors. Last year the California Supreme Court created the ABC test, which made it difficult to justify using independent contractors.
The decision to hire someone as an independent contractor lies with the hiring company. If your company misclassifies that worker, your company will be the only one held legally responsible. The contractor holds no liability so it’s important you do your due diligence. The default is they are an employee and they are subject to the ABC test.
The passing of AB5 clarifies who will be exempt from the ABC test. If they are exempt from ABC, they must instead pass the Borello test. Let’s first look at the parts of each test.
ABC Test
The workers must pass all 3 points. If they fail any of these, they must be an employee.
A — You can’t control the services or how the worker performs the work (this means you can only tell them the outcome you want, not how they get there).B — The work performed must be outside the usual course of your business (this means the work they do doesn’t touch your clients, [click to read more …]