What is California’s ABC Test?

Employment law in California is based on a number of different conditions and scenarios, with the ultimate goal of providing safe, fair treatment for all employees. It’s here that an important, and often overlooked distinction exists. There are significant legal differences when your employer classifies you as an employee versus an “independent contractor.”

Generally speaking, you’re entitled to extensive legal protections in California as an employee that you may not receive as an independent contractor. Consequently, lawmakers saw the need to set a legal standard for what makes a person an employee or an independent contractor. This standard, known as the “ABC Test”, is an extremely important aspect of the employer-employee relationship in California.

Experienced, Dedicated Support From California Employment Lawyers

At Maison Law, our team of experienced California employment lawyers has the dedication and knowledge you need to make sure your legal rights are protected in the workplace. We strive to give each one of our clients a specific, tailored approach to their case. This can include any misclassification issues on the part of your employer. No matter what the reason is, we can ensure you get the treatment and benefits you deserve under the law. Contact us today for a free, no-obligation consultation to learn more.

Differences Between an Employee and Independent Contractor in California

It may not seem like it, but there are significant differences between being an employee and an independent contractor in California. On a basic level, it’s first important to understand how these two elements are defined.  An employee is generally defined as:

• Someone who works for an employer under an employment relationship, whether it be full-time, part-time, seasonal, or other agreement.

On the other hand, an independent contractor is usually defined as:

• Someone who performs services for a business but is not an employee

The key factor that distinguishes an independent contractor from an employee is the degree of control the employer has over the worker. That said, there are a number of differences between the two. These include:

• Control and direction – Employers typically have more control and direction over employees, including setting their work schedules, providing training, and directing how work is performed. Independent contractors, on the other hand, have more freedom and control over their work, including setting their own schedules and determining how work is performed.
• Benefits and protections – Employees are entitled to certain benefits and protections under state and federal law, such as minimum wage, overtime pay, workers’ compensation, and unemployment insurance. Independent contractors are not entitled to these benefits and protections.
• Tax obligations – Employers are required to withhold payroll taxes from their employee’s paychecks and contribute to Social Security and Medicare on their behalf. Employers are not required to do this for independent contractors, who are responsible for paying their own taxes.
• Liability – Employers are typically liable for their employee’s actions and behavior while on the job. Independent contractors are generally responsible for their own actions and behavior.
• Termination – Employees generally have more job security than independent contractors and are protected by employment laws that govern termination. Independent contractors have less protection in this regard and may have their contracts terminated at any time without cause.

When you understand the differences between employees and independent contractors, it begins to shed some light on why the legal standard was needed.

What is the California ABC Test?

Established by the California Supreme Court in 2018, the “ABC Test” was first codified into law with the passage of Assembly Bill 5 (AB 5) in 2019.  The three-part ABC test requires that for a worker to be classified as an independent contractor, the following conditions must be met:

A. The worker is free to do their job without being controlled or directed by the employer.

B. The work the worker performs is not part of the usual business of the employer.

C. The worker is regularly engaged in an independent trade or business similar to the work they are performing.

If any of these conditions are not met, the worker is considered an employee under California law and entitled to the benefits and protections of an employee, such as:

• Minimum wage
• Overtime pay
• Workers’ compensation
• Anti-discrimination and harassment protections
• Unemployment

Obviously, this test has been met with some resistance from employers. At the same time, there can be serious legal and financial consequences when a California employer purposefully (or accidentally) misclassifies employees as independent contractors.

Legal Options for Misclassified Employees in California

For many workers in California, it can sometimes be difficult to figure out how you are classified by your employer. This is especially true in certain industries or jobs with misleading information or duties. The complexities of the law and the power dynamics in the employment relationship can make it difficult for you to determine your classification status and assert your rights.

However, when you have reason to believe that you’ve been misclassified as an independent contractor, you have a few options that our team of experienced California employment lawyers can assist you with:

• File an administrative complaint – Misclassified employees may file a claim with the California Labor Commissioner’s Office to recover unpaid wages, including minimum wage, overtime pay, and meal and rest breaks, among other potential damages. The Labor Commissioner’s Office investigates these claims and may hold a hearing to determine whether you were indeed misclassified by your employer and are entitled to back pay.
• File a lawsuit – As a misclassified employee, you can also file a lawsuit against your employer for any violations of the Labor Code that you are entitled to. This may include claims for unpaid wages, overtime pay, discrimination or harassment, wrongful termination, or retaliation. As an employee, you could potentially recover damages like lost wages, emotional distress, and attorney’s fees if successful.
• Join a class action lawsuit – If multiple employees have been misclassified by the same employer (as is often the case), you and the other employees may be able to join together in a class action lawsuit to recover unpaid wages and other damages. Class action lawsuits can be an effective way to hold employers accountable for widespread labor law violations.

Taking the step of legal action against your employer can be intimidating and challenging, especially in a situation where you have been misclassified as an independent contractor. That said, it’s important to stand up for your rights to make sure the treatment stops happening. As such, working with our team of experienced and knowledgeable California employment lawyers can help you navigate this complex process.

Maison Law Can Answer Your Questions

Understanding the difference between being classified as an employee or an independent contractor is one of the most misunderstood aspects of California employment law. While it is a relatively new standard, the ABC Test goes a long way in clearing up some of this confusion. That said, when you believe that your employer is misclassifying you in an effort to shirk their legal responsibilities, you are well within your rights to take action.

At Maison Law, we understand how difficult and harmful it can be to have your workplace rights violated. With a focus on personalized attention and a commitment to obtaining the best possible outcome for our clients, our team of experienced California employment lawyers is dedicated to serving your legal needs. Contact us today to schedule a free, no-obligation consultation to learn more about your options.