A general contractor subcontracts electrical work to an LLC. The electrician works exclusively for this contractor, uses the contractor's materials, and follows the contractor's daily schedule. Under AB5, this relationship is likely:
Correct Answer
C) Employee relationship requiring payroll taxes
Despite LLC status, the exclusive work arrangement, use of contractor's materials, and daily schedule control indicate an employee relationship under AB5's ABC test, particularly failing the control prong.
Why This Is the Correct Answer
Under California's AB5 law, the ABC test determines worker classification. This relationship fails the 'A' prong (control) because the contractor controls the electrician's daily schedule and work methods. It also fails the 'B' prong (business nature) since electrical work is integral to general contracting. The exclusive work arrangement and use of contractor's materials further demonstrate employee-level control, requiring payroll tax withholding regardless of LLC status.
Why the Other Options Are Wrong
Option A: Depends on the written contract terms
Written contract terms alone cannot override the actual working relationship. AB5's ABC test examines the real-world control, business integration, and independence factors, not just contractual language. The actual work arrangement controls the classification determination.
Option B: Independent contractor due to LLC status
LLC status is irrelevant under AB5. The law focuses on the actual working relationship through the ABC test, not the worker's business entity structure. Many employees operate through LLCs while still being classified as employees based on control and integration factors.
Option D: Independent contractor under skilled trades exemption
While skilled trades may have some exemptions, this electrician fails the basic independence requirements. The exclusive work arrangement, daily schedule control, and use of contractor's materials override any potential skilled trades considerations under AB5's strict ABC test requirements.
Memory Technique
ABC Test Memory: 'Always Be Checking' - A=Autonomy (free from control), B=Business (outside usual course), C=Customarily independent trade. All three must pass for independent contractor status.
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