A general contractor subcontracts electrical work to ABC Electric. Under what circumstances would ABC Electric most likely be considered an employee rather than an independent contractor under AB 5?
Correct Answer
C) The contractor controls when, where, and how ABC Electric performs the work
Under the ABC test's first prong, if the hiring entity controls the manner and means of performing the work, it indicates an employment relationship rather than independent contractor status.
Why This Is the Correct Answer
Under California AB 5, the ABC test's first prong (Prong A) asks whether the hiring entity controls or directs the worker in the performance of the work, both under the contract and in fact. If the general contractor controls when, where, and how ABC Electric performs the electrical work — dictating methods, schedule, and location — this control relationship is the hallmark of employment, not independent contracting.
Why the Other Options Are Wrong
Option A: ABC Electric carries their own liability insurance
Carrying their own liability insurance does not determine employment status under the ABC test. Insurance is a factor that may suggest independence, but it is not one of the three prongs of the ABC test used under AB 5. A company can carry its own insurance and still be classified as an employee if the control prong is met.
Option B: ABC Electric has other clients and advertises their services
Having other clients and advertising services relates to Prong C of the ABC test (whether the worker is engaged in an independently established trade), which actually supports independent contractor status — not employee status. This answer choice is a distractor that describes a factor pointing toward independence, not employment.
Option D: ABC Electric provides their own tools and equipment
Providing their own tools and equipment is a traditional common-law factor suggesting independent contractor status, but it is not one of the three ABC test prongs under AB 5. Under AB 5, the analysis centers on control, scope of work, and independent business establishment — not tool ownership.
Memory Technique
Remember the ABC test: A = control (does the hirer control how work is done?), B = business scope (is the work outside the normal business?), C = customarily established trade (does the worker run their own independent business?). For this question, focus on Prong A — control is the key factor that tips toward employee status.
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