Employment Status

ABC Test

The ABC test defines if a worker is an employee or independent contractor in California.

Note: The ABC test must be used for the purpose of the Unemployment Insurance Code beginning January 1, 2020.

A worker is considered an employee and not an independent contractor, unless the hiring entity meets all three conditions of the ABC test:

  1. The person is independent of the hiring organization in connection with the performance of the work, both under the contract for the performance of the work and in fact.
  2. The person performs work that is outside the hiring entity’s business.
  3. The person is routinely doing work in an independently established trade, occupation, or business that is the same as the work being requested and performed.

Note: Workers are considered employees unless proven otherwise. The hiring organization must show that workers meet all conditions of the ABC test in order to classify them as independent contractors, unless there is a statutory exclusion or determination of employment.

Proposition 22 makes app-based drivers for network companies independent contractors and not employees or agents if the network company meets certain conditions.

Learn more about AB 5 and how to determine if a worker is an independent contractor by viewing the recorded webinar AB 5 Motor Carrier Worker Classification.

ABC Test Exceptions

The ABC test is used for most workers, but for some jobs, industries, and contracting relationships, the Borello multifactor test applies.

For more information, visit the Employment Status Portal.

Help Us Fight Fraud

Hiring entities are responsible for classifying their workers correctly. We will continue to inspect and audit hiring entities to make sure they meet payroll tax requirements. These efforts make sure state laws protect workers and prevent unfair competition that may lead to higher taxes and expenses for businesses.

If you believe someone is not following the law, visit Help Us Fight Fraud to submit an online complaint or send a complaint by mail (PDF).

e-Services for Business

Use e-Services for Business to manage your employer payroll tax account online.

Contact Us

If you have questions, Contact Payroll Taxes. You can also contact the Taxpayer Assistance Center at 1-888-745-3886 or visit your local Employment Tax Office.