According to California law (AB 5 and the Dynamex decision), which test is primarily used to determine if a worker is an employee versus an independent contractor?
Correct Answer
A) The ABC Test
California Assembly Bill 5 (AB 5) codified the Dynamex decision, establishing the ABC Test as the primary standard for determining worker classification. Under this test, a worker is presumed to be an employee unless the hiring entity proves all three ABC criteria are met for independent contractor status.
Why This Is the Correct Answer
AB 5 (signed into law in 2019) codified the California Supreme Court's Dynamex decision by establishing the ABC Test as the primary standard for worker classification in California. Under this test, a worker is presumed to be an employee unless the hiring entity can prove all three prongs: (A) the worker is free from control, (B) the work is outside the usual course of the hiring entity's business, and (C) the worker is customarily engaged in an independently established trade or business.
Why the Other Options Are Wrong
Option B: The Common Law Control Test
The Common Law Control Test was the older standard that focused on the degree of behavioral and financial control over the worker. While still used in some federal contexts, AB 5 replaced it with the ABC Test for most California workers.
Option C: The Economic Realities Test
The Economic Realities Test is used by the U.S. Department of Labor under federal law (FLSA) to assess whether a worker is economically dependent on the employer. It is not the primary test under California law post-AB 5.
Option D: The IRS 20-Factor Test
The IRS 20-Factor Test is a federal tax guidance tool for determining worker classification for tax purposes. It is not the California standard and predates AB 5's modern framework.
Memory Technique
ABC = Always Be Classifying employees. All three prongs (A, B, C) must be met to call someone a contractor. Fail even one prong and the worker is an employee. Think 'ABC or they're with me (as an employee).'
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