Workers CompensationQuestion 209 of 53182% of test-takers answer this correctly

Under California's ABC test (Labor Code §2775), a worker is classified as an employee — and therefore must be covered by workers' compensation — unless the hiring entity proves all three of which conditions?

a.Worker is over 18 years of age; has signed a written independent-contractor agreement with the hiring entity before starting; and is paid on a Form 1099-NEC at year end instead of a W-2 payroll check with withholding
b.Worker holds a current state occupational license; has printed business cards and a listed business telephone number; and sets their own daily working hours and days off without the hiring entity's approval
c.Worker is free from control/direction of the hirer; performs work outside the usual course of the hirer's business; is customarily engaged in an independently established trade
d.Worker owns their own hand tools and work vehicle; holds another paying job elsewhere; and lives somewhere in California

Explanation

Labor Code §2775 codifies the ABC test from Dynamex / AB 5. To classify a worker as an independent contractor (and thereby avoid the WC obligation), the hiring business must prove ALL THREE prongs: (A) freedom from control and direction, (B) the work is outside the hirer's usual course of business, and (C) the worker is customarily engaged in an independently established trade or business of the same nature.

Law Reference: Cal. Labor Code §2775 (AB 5 / ABC test)

This topic, taught in full in the California Property & Casualty Broker-Agent guide. California Property & Casualty Broker-Agent Study Guide — 2026 Edition — PDF + EPUB, $24.99 · 14-day refund →

Practice all 531 questions free — no signup required.

Own the complete California Property & Casualty Broker-Agent guide — PDF + EPUB, $24.99 →

Related questions on this topic

Last reviewed: · editorial process

PrepPass team · Verified against California Property & Casualty Insurance License Exam · How we review
Report