The ABC test for independent contractor classification applies retroactively, the California Supreme Court ruled last week. The court first established the ABC test for determining worker classification in its May 2018 ruling in Dynamex Operations West Inc. v. The Superior Court of Los Angeles County, Charles Lee et al.
Under the ABC test, workers can only be classified as independent contractors if all these conditions are met:
- The worker is free from the control and direction of the hirer in connection with the performance of the work, both under the contract for the performance of the work and in fact; and
- The worker performs work that is outside the usual course of the hiring entity’s business; and
- The worker is customarily engaged in an independently established trade, occupation, or business of the same nature as that involved in the work performed.
The Ninth Circuit ruled in May 2019 that the ABC test could be applied retroactively. The Supreme Court last week affirmed that ruling.
Fiona Coombe, director of legal and regulatory research for SIA, next week will write more extensively on the court ruling and IC classification in California.