Independent contractors are not considered to be employees covered by workers’ compensation.2

Beginning July 1, 2020, the determination of independent contractor status in the workers’ compensation context is governed by the ABC test found in Labor Code section 2775. Under the ABC test, an individual is presumed to be an employee, unless the company can prove all of the following:

• A) That the worker is free from 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) That the worker performs work that is outside the usual course of the hiring entity’s business; and
• C) That the worker is customarily engaged in an independently established trade, occupation or business of the same nature as the work performed.

California’s complex worker classification law contains numerous exceptions to the ABC test, in which case an alternative test, specified by statute, applies.3 Under most exceptions to the ABC test, the common law factor-based control test applies, also referred to as the Borello test after the California Supreme Court case S. G. Borello & Sons, Inc. v. Department of Industrial Relations, 48 Cal.3d 341 (1989).

One such exemption was newspaper distributors working under contract with a newspaper publisher, and newspaper carriers working under contract with either a newspaper publisher or newspaper distributor. The sunset for this exemption has been extended to January 1, 2025. Part of the extension also requires newspaper publishers and distributors to annually report information regarding carrier employment, wage claims and lawsuits, and average wage rate to the Labor and Workforce Development Agency (LWDA).4

Also extended to January 1, 2025, was the sunset on the exemption from the ABC test for manicurists and subcontractors in the construction trucking industry. 5

Existing exemptions include persons providing professional services under specified circumstances, including certain services provided by still photographers, photojournalists, freelance writers, editors and newspaper cartoonists. The 2020 bill permanently exempts certain occupations in connection with creating, marketing, promoting or distributing sound recordings or musical compositions.

For more information on independent contractors and the new ABC test, see Independent Contractor.

1. Lab. Code sec. 3353