CashoutGlossary / ABC test
ABC test
A strict state test of worker status: you're an employee unless the business proves all three parts, A (no control), B (outside work) and C (own trade).
The ABC test is how some states decide whether a worker is an employee or an independent contractor. It starts from the position that you're an employee. To treat you as a contractor, the business must show all three of these:
- A: you're free from the business's control and direction in doing the work.
- B: the work is outside the usual course of the business.
- C: you're customarily engaged in an independently established trade, occupation or business.
Failing any one part makes you an employee. Serving food is the usual course of a restaurant's business, so a restaurant paying its servers as contractors would have trouble passing it.
California applies the test, and its labor agency explains the parts using the state Supreme Court's Dynamex decision. Massachusetts has a similar three-prong test in its Independent Contractor Law, where the burden of proof is on the employer. California voters later passed Proposition 22, under which app-based rideshare and delivery drivers are independent contractors when the company meets conditions such as not setting their hours and not requiring them to accept specific requests.
The ABC test is state law, and it isn't the only test. The IRS uses its own control-based rules for federal taxes, and the Department of Labor uses an economic reality test under the FLSA, so the same job can be judged differently for different purposes. If you think you've been misclassified, start with your state labor department.
Related terms
Independent contractor · Misclassification · Fair Labor Standards Act (FLSA) · Department of Labor (DOL)
