February 18, 2025 Table of Contents
Being misclassified as an independent contractor can cost you minimum wage, overtime, breaks, expense reimbursement, and access to unemployment and workers’ compensation benefits. In California, the law starts from the assumption that a worker is an employee, and the hiring company has to prove otherwise. Below, we explain the test California uses, what you may be owed, and what to consider if your label does not match how you actually work.
How do you know if you are misclassified as an independent contractor in California?
Under California’s ABC test, a person who provides labor or services for pay is considered an employee unless the hiring entity shows all three conditions: the worker is free from its control, the work is outside its usual course of business, and the worker is customarily engaged in an independent business of the same kind (Lab. Code § 2775(b)(1)). If the company cannot prove all three, the worker is generally an employee.
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Zev Abramson is the founding partner of Abramson Labor Group and a passionate advocate for employees whose voices too often go unheard. He earned his J.D. from Loyola Law School, but his commitment to protecting workers began long before he…
California uses the ABC test for purposes of the Labor Code, the Unemployment Insurance Code, and the state’s wage orders. A person providing labor or services for pay is considered an employee unless the hiring entity demonstrates that all of the following are true (Lab. Code § 2775(b)(1)):
| Part | What the hiring entity must show | Signs it may fail |
|---|---|---|
| A: Control | The worker is free from its control and direction in performing the work, both under the contract and in fact | Set hours, required methods, close supervision, required training |
| B: Usual course of business | The work is outside the usual course of its business | You do the same work the company sells, or the same work as its employees |
| C: Independent business | The worker is customarily engaged in an independently established trade, occupation, or business of the same nature | No business of your own, no other clients, no way to market your services |
Because the hiring entity must prove all three parts, failing any one of them generally means the worker is an employee. The “signs” column reflects common patterns, not a complete legal analysis; each case depends on its facts.
Misclassification questions come up often in certain fields. Construction workers are sometimes labeled contractors despite working set hours under a supervisor (see California construction workers’ rights), and in entertainment, crew and artists are often hired project by project (see entertainment workers’ rights in California).
Not every job is judged by the ABC test. The Labor Commissioner explains that for some occupations and industries, the Labor Code applies the multifactor test from S. G. Borello & Sons, Inc. v. Department of Industrial Relations (1989) 48 Cal.3d 341 instead, and that some of these exemptions involve complicated rules (Labor Commissioner). Courts also apply Borello if they rule that the ABC test cannot be applied in a particular context on grounds other than an express exception (Lab. Code § 2775(b)(3)).
Whether an exemption applies to a specific job is often the central question in these cases. An employment attorney can evaluate which test applies to your work.
California’s wage and hour laws, such as minimum wage, overtime, and meal and rest breaks, protect employees but not independent contractors, and employees also have access to unemployment insurance (Labor Commissioner). Depending on the facts, a misclassified worker may be able to recover:
California law makes it unlawful to willfully misclassify an individual as an independent contractor. “Willful misclassification” means avoiding employee status by voluntarily and knowingly misclassifying the worker. A violation can bring a civil penalty of $5,000 to $15,000 for each violation, and $10,000 to $25,000 for each violation when the employer has engaged in a pattern or practice (Lab. Code § 226.8). When misclassification affects many workers, Labor Code claims can sometimes be pursued through PAGA claims, depending on the facts.
Misclassification usually leads to several claims at once, such as unpaid wages, unpaid overtime, and unreimbursed expenses, and different claims can have different filing deadlines. The deadline that applies depends on the claim, the facts, and where the claim is brought, so do not assume one period applies to every part of a case. For an overview of the wage claim process, see how long a wage claim takes in California. An employment attorney can evaluate which deadlines apply to your situation.
If you are paid as a contractor but work like an employee, were told you cannot claim overtime or breaks because you are “1099,” or were cut off after asking about your classification, consider speaking with a California employment lawyer. An attorney can review how the work was actually done, identify which test applies, and explain what you may be owed.
At Abramson Labor Group, we represent California workers who have been misclassified as independent contractors. Our case reviews are free and confidential, and we work on contingency. Request your free case evaluation or call us at (213) 493-6300.
Not by itself. Under the ABC test, the hiring entity must show the worker is free from its control both under the contract and in fact, and must also satisfy the other two parts (Lab. Code § 2775(b)(1)).
Under the ABC test, the hiring entity does. A worker is considered an employee unless the hiring entity demonstrates that all three conditions are satisfied (Lab. Code § 2775(b)(1)).
Possibly. If you are an employee, your employer must reimburse necessary expenses incurred in direct consequence of your job duties (Lab. Code § 2802(a)). Whether a specific cost qualifies depends on the facts.
This article is general information about California law, not legal advice. Every situation is different. For advice about your specific case, talk to a licensed California employment attorney.
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