EmploymentQuestion 560 of 1605
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.
Law Reference: Labor Code §2776Practice all 1605 questions free — no signup required.
Related questions on this topic
- Labor Code §6310 protects employees from retaliation when they:
- Under Labor Code §6311, an employee who refuses to perform work that would create a real and apparent hazard violating an occupational safety order may NOT:
- What is the civil penalty range a contractor faces for each "willful misclassification" of an employee as an independent contractor under Labor Code §226.8?
- A contractor lays off three carpenters on Wednesday at the end of a framing project. Their final wages must be paid:
- A drywall finisher quits without giving any prior notice on a Monday morning. When are her final wages due?
- A contractor willfully fails to pay a discharged employee's final wages on time. The employee's daily wage was $240. Final wages are paid 12 days late. What is the maximum waiting-time penalty under §203?
Last reviewed: · editorial process
Sen Lin, PrepPass Founder · Verified against California CSLB Contractor License Law & Business Exam · How we review
Reviewed by Abraham Chen — Licensed California General Contractor (CSLB License #1101856 — verify)