Under California AB 5, what must a hiring contractor demonstrate to classify a worker as an independent contractor under the "ABC test"?
Explanation
The ABC test in Labor Code section 2775(b)(1) presumes a worker is an employee unless the hiring entity proves all three: (A) the worker is free from the control and direction of the hirer in performing the work; (B) the work is outside the usual course of the hirer's business; and (C) the worker is customarily engaged in an independently established trade of the same nature as the work performed. All three, not the best two. A 1099 is a tax form the hirer issues and proves nothing about the relationship. Bringing tools and setting hours is the old common-law control factor, which survives inside prong A but is not the test. And the CSLB licence is the most instructive wrong answer: it is a real requirement, but of section 2781 - the construction-subcontractor exception, which takes a relationship OUT of the ABC test altogether if the contractor shows a written subcontract, a licensed subcontractor working within its licence, a separate business location, authority to hire and fire, and five more conditions.
Law Reference: Labor Code §2775(b)(1); §2781(a)This topic, taught in full in the CSLB Law & Business guide. CSLB Law & Business — Complete Study Guide (2026) — PDF + EPUB, $24.99 · 14-day refund →
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