Independent Contractor or Employee?

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We get this question all the time - especially from California companies. And it’s more important now than ever to get this answer correct as California is ramping up with a budget this year that includes more than $21 million to enforce independent contractor misclassification.

Arthur International created a great infographic for helping determine whether you have an independent contractor or employee per California’s AB 5 Laws.

It's essential to know all hires are considered employees unless they meet the "ABC test" criteria.  

A - is free from the control and direction of the company in performing work, both practically, and in the contractual agreement 
B - performs work that is outside the usual course of the company's business
C - is customarily engaged in an independently established trade, occupation, or business of the same nature as the work performed for the company

Let’s get real. The legal jargan for the ABC test can spin your mind a bit. That’s why we love this infographic - so simple! Smarter not harder.

Have questions? Contact our experts!