EmploymentQuestion 560 of 1632
Under the Labor Code §2776 business-to-business exemption from the ABC test, all of the following are required EXCEPT:
a.The business service provider is free from control and direction of the contracting business
b.The business service provider has a business license, if required
c.The two businesses must share an owner with at least 25% common equity
d.The business service provider customarily engages in an independently established business of the same nature
Explanation
Section 2776 lists numerous conditions that must ALL be met for the business-to-business exemption — including freedom from control, separate business location, valid business license, independently established business, and contracting directly with the business — but does NOT require any common ownership between the two businesses.
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Reviewed by Abraham Chen — Licensed California General Contractor (CSLB License #1101856 — verify)