The California Supreme Court has established new criteria for classifying workers as Independent contractors. In Dynamex Operations West, Inc. v. Superior Court, the Court rejected the previous multi-factor test and instead issued a rigid 3-factor test, called the “ABC” test.
Under the ABC test, each of the following three factors must be met in order to classify a worker as an independent contractor:
- The worker must be free from the control and direction of the hiring company in performing the work.
- The work must take place outside the usual course of the business of the hiring company’s business.
- The worker is customarily engaged in an independent established trade, occupation or business.
This ruling will no doubt have a significant impact on gig companies in the Bay Area (Uber, Lyft, and DoorDash, etc.), that rely heavily on independent contractors.
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