{"id":3799,"date":"2019-10-02T20:38:24","date_gmt":"2019-10-03T00:38:24","guid":{"rendered":"http:\/\/employerdefensereport.com\/?p=3799"},"modified":"2026-03-20T11:46:52","modified_gmt":"2026-03-20T15:46:52","slug":"californias-expansion-of-dynamexs-abc-test-severely-restricts-when-employers-may-properly-classify-workers-as-independent-contractors","status":"publish","type":"post","link":"https:\/\/www.connmaciel.com\/employer-defense-report\/californias-expansion-of-dynamexs-abc-test-severely-restricts-when-employers-may-properly-classify-workers-as-independent-contractors\/","title":{"rendered":"California\u2019s Expansion of Dynamex\u2019s ABC Test Severely Restricts When Employers May Properly Classify Workers as Independent Contractors"},"content":{"rendered":"

Last month, California Governor Gavin Newsom signed Assembly Bill 5<\/a> into law.\u00a0 This lengthy bill generally codifies and expands the applicability of the three-part ABC test from the Dynamex<\/em> decision in determining whether a worker is an employee or independent contractor for purposes of California Labor Code, Unemployment Insurance Code, and the Wage Orders.<\/p>\n

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The ABC Test<\/strong><\/p>\n

As this blog previously discussed<\/a>, the Supreme Court decision in Dynamex<\/em> held that for purposes of the California Wage Orders, a worker who performs services for hire is an employee, rather than an independent contractor, unless the hiring entity establishes each of these three factors:<\/p>\n

(A) that the worker is free from the control and direction of the hiring entity in performing the work;<\/p>\n

(B) that the worker performs work that is outside the usual course of the hiring entity\u2019s business; and<\/u><\/p>\n

(C) that the worker is customarily engaged in an independently established trade, occupation or business of the same nature as the work performed.<\/p>\n

This ABC test made it more difficult to properly classify workers as independent contractors than under the previously applicable Borello<\/em> multi-factor test.<\/p>\n

As we previously noted here<\/a>, AB 5 expanded upon Dynamex<\/em> by making the ABC test applicable under the Labor Code and Unemployment Insurance Codes, in addition to the Wage Orders.\u00a0 This means the ABC test also applies for purposes of unemployment benefits claims and wage and hour claims under the Labor Code.<\/p>\n

The Numerous Exceptions<\/strong><\/p>\n

At the same time, AB 5 carves out a number of exceptions from the ABC test that were not specified in Dynamex<\/em>, including, among others:<\/p>\n