Legislation

California Labour Code (as amended)

Country: United States

Jurisdiction: State (State of California)

Authority: California State Legislature

Legislation type: Statutory act

Binding: Yes

Source: Visit page

Date of adoption: 2019

Legal Status: In force

Platform(s): Location-based (All) Online (All)

Summary

The California Labour Code sets out rules governing the employment relationship. The Code establishes a presumption of employee status unless the hiring entity demonstrates specific conditions, known as the ABC test. It provides that if the ABC test cannot be applied, the classification must follow the Borello test. It also maintains any express exceptions or definitions provided under other provisions of the Code or applicable orders.

Additional provisions may be included in the original California Labour Code that are not covered in this summary. For complete information, please refer to the full text of the Code.

Thematic areas

Article 2775. (a) As used in this article: (1) “Dynamex” means Dynamex Operations W. Inc. v. Superior Court (2018) 4 Cal.5th 903. (2) “Borello” means the California Supreme Court’s decision in S. G. Borello & Sons, Inc. v. Department of Industrial Relations (1989) 48 Cal.3d 341.

(b) (1) For purposes of this code and the Unemployment Insurance Code, and for the purposes of wage orders of the Industrial Welfare Commission, a person providing labor or services for remuneration shall be considered an employee rather than an independent contractor unless the hiring entity demonstrates that all of the following conditions are satisfied: (A) The person 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) The person performs work that is outside the usual course of the hiring entity’s business. (C) The person is customarily engaged in an independently established trade, occupation, or business of the same nature as that involved in the work performed.

(2) Notwithstanding paragraph (1), any exceptions to the terms “employee,” “employer,” “employ,” or “independent contractor,” and any extensions of employer status or liability, that are expressly made by a provision of this code, the Unemployment Insurance Code, or in an applicable order of the Industrial Welfare Commission, including, but not limited to, the definition of “employee” in subdivision 2(E) of Wage Order No. 2, shall remain in effect for the purposes set forth therein.

(3) If a court of law rules that the three-part test in paragraph (1) cannot be applied to a particular context based on grounds other than an express exception to employment status as provided under paragraph (2), then the determination of employee or independent contractor status in that context shall instead be governed by the California Supreme Court’s decision in S. G. Borello & Sons, Inc. v. Department of Industrial Relations (1989) 48 Cal.3d 341 (Borello). (Added by Stats. 2020, Ch. 38, Sec. 2. (AB 2257) Effective September 4, 2020.)