The ABC Test: Is your work central to your company’s business?

California uses the ABC Test to determine if a worker is an employee or independent contractor. A worker can only be an independent contractor if the company can show:

  • A: They don’t control how the person does their work
  • B: The work isn’t part of what the company typically does
  • C: The person runs their own separate business

Part B, in particular, examines whether the worker’s duties are part of the employer’s regular business. Does the worker provide services that are part of what the company offers or sells? If yes, then the company must classify that worker as an employee, not an independent contractor.

Why does this matter?

As an employee, you have certain rights and protections that independent contractors don’t have. This includes:

  • Getting paid at least minimum wage
  • Earning extra pay for overtime work
  • Taking meal and rest breaks
  • Receiving insurance if you’re hurt at work
  • Collecting unemployment benefits if you lose your job

Employers must follow workplace safety rules to protect their employees and pay part of their Social Security and Medicare taxes. They also need to pay you back for work-related expenses. Independent contractors, on the other hand, have to handle all these costs and responsibilities on their own. That’s why proper classification matters – it affects both your rights and your financial security.

Are you being misclassified?

California law looks beyond surface-level work arrangements when determining employment status. Even if you work from home, set your own schedule or receive project-based pay, these factors alone don’t make you a contractor.

Watch for these warning signs of misclassification:

  • You perform work that’s similar or identical to the company’s employees.
  • The company promotes or advertises your type of work as their service.
  • Your role is essential for the company to deliver its products or services.
  • The company relies on workers like you to generate revenue.

The relationship between your work and the company’s business drives your proper classification. While working remotely or having multiple clients might feel like contractor work, your employment classification depends on how your work fits into the company’s core business model.

Know where you stand under California’s ABC Test

The consequences of misclassification can be significant. If you have questions about your status, consider speaking with an attorney.