Less than one year after the California Supreme Court’s decision in Dynamex Operations West v. Superior Court upended long-settled questions on independent contractor and employee classifications, stakeholders on both sides of the debate are gearing up for a legislative fight to define Dynamex’s reach.
Dynamex overturned nearly 30 years of precedent, replacing the multi-factor Borello analysis with the much narrower “ABC” test. Under the “ABC” test, workers are presumed to be employees unless the employer can demonstrate the worker: (a) is free from the control and direction of the hiring entity in connection with the performance of the work, both under the contract for the performance of the work and in fact; (b) performs work that is outside the usual course of the hiring entity’s business; and (c) is customarily engaged in an independently established trade, occupation, or business of the same nature as the work performed. An example given by the court is that a plumber or electrician hired to do work at a retail clothing store would be an independent contractor, but a seamstress who works from home for a clothing manufacturer would be an employee.
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