EmploymentQuestion 644 of 1605
Under California's ABC test codified in Labor Code §2775 (AB-5), a worker is presumed to be an EMPLOYEE (not an independent contractor) unless the hiring entity proves all three of the following EXCEPT:
a.The worker performs work that is outside the usual course of the hiring entity's business
b.The worker is free from the control and direction of the hiring entity in connection with the performance of the work
c.The worker is customarily engaged in an independently established trade, occupation, or business of the same nature as the work performed
d.The worker has signed a written 'independent contractor agreement' acknowledging that status
Explanation
Labor Code §2775 (codifying Dynamex and AB-5) presumes employee status unless the hiring entity proves all three ABC prongs: (A) freedom from control, (B) work outside the usual course of the hiring entity's business, and (C) independent establishment in the same trade. A written 'independent contractor agreement' is NOT one of the ABC prongs — labels are explicitly disregarded; substance controls. The construction-subcontractor exception in §2781 still requires the sub to be licensed and meet additional criteria; without those, even a written agreement cannot create independent-contractor status.
Law Reference: Labor Code §2775 (AB-5)Practice all 1605 questions free — no signup required.
Related questions on this topic
- Under Wage Order 16, may a construction contractor take a credit against the minimum wage for lodging it provides to a remote-site employee?
- An employee accrues paid sick leave under the statutory method, but does not use any of it by the end of the year. Under Labor Code §246(d), what must happen?
- Which of the following items is NOT required to appear on an itemized California wage statement under Labor Code §226?
- Under Labor Code §2781 (the construction-subcontractor exception to AB-5), a bona fide business-to-business relationship requires, among other things, that the subcontractor:
- IWC Wage Order 16, which covers on-site construction, drilling, logging, and mining, generally requires that non-exempt workers receive an unpaid meal period of at least:
- Under Labor Code §226.8, a contractor who willfully misclassifies an employee as an independent contractor faces a civil penalty of:
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)