Both AB 5 and the Labor Code do not require using the ABC test to ascertain the status of a worker. This is concerning any job within the state of California. The ABC test does apply to many jobs in California. However, there are some jobs where the Borello test is used instead as a determinant of the status of a worker. There are also certain jobs where the Borello test can be used instead of the ABC test. However, the hiring entity would have to fulfill additional requirements initially.
The summation of all of this is the following:
The types of occupations where the Borello test can be used instead of the ABC test are the following:
- Some insurance agents and brokers
- Some physicians, surgeons, dentists, podiatrists, psychologists, and veterinarians
- Some attorneys, architects, engineers, private investigators, and accountants
- Some securities brokers, investment advisors, as well as the agents and representatives working with them
- Some individuals involved in direct sales
- Some commercial fishers (until 12/31/22 without a legislative extension)
- Some newspaper distributors or carriers (until 12/31/20 without a legislative extension)
There are certain types of occupations or contractual agreements where more requirements have to be met. This is in regards to using of the Borello test rather than the ABC test. These requirements are the following. These involve contracts where there is a use of professional services.
- Human Resources Administration
- Travel Agents
- Graphic Design
- Grant Writers
- Fine Art Artists
- Enrolled Agents
- Payment Processing Agents
- Photojournalists & Photographers of Still Life
- Freelance Writers, Editors, and Cartoonists for Newspapers
- Licensed Barbers
- Manicurists (up until 12/31/21)
For these professional services, the Borello test is applicable. It will ascertain whether a worker is an employee if requirements necessary to be met are met.
In addition, particular workers who are conducting work under a subcontract within the construction industry will have the Borello test apply. The Labor Code section 2750.5 will also be applicable. This is to determine whether the worker is an employee of a particular contractor, if requirements will be met.
There are also some providers of services who receive business thanks to referrals. The services these individuals provide are the following:
- Graphic Design
- Web Design
- Event Planning
- Minor Home Repair
- House Cleaning
- Furniture Assembly
- Animal Services
- Dog Walking & Grooming
- Pool Cleaning
- Yard Cleanup
In all of these cases, the Borello test is used to ascertain if a provider of any of these services is an employee. This is in regards to them being an employee of the party that has referred them.
There are also particular workers who conduct services in connection with a contract initiated by a third party. The type of third party being referred to here is a motor club that offers services related to motor vehicles. The Borello test would apply in this case to ascertain if an individual is an employee of the club.
There are some bona fide business-to-business (B2B) relationships under contract where the Borello test is applicable. The test in these cases will ascertain if a business offering particular services is an employee of another company contracting for services.
There are two industries in particular that require closer scrutiny. This involves special rules found within the Labor Code section 2750.3. According to the Business and Professions Code, the following industries have to abide by additional rules:
- Some individuals in possession of a real estate license will succumb to additional rules. These individuals are governed by a test of their status as either an employee or independent contractor. Section 10032(b) of the Business and Professions Code will be applicable. If, for some reason, it is not, the Borello test will have to be applied. However, starting on 7/1/20, the ABC test will apply in the area of workers’ compensation.
- Some repossession agencies will succumb to additional rules. The individuals within these agencies will be governed by Section 7500.2 of the Business and Professions Code.
There will sometimes be rather complex rules involved when some industries, occupations, and contracting relationships are exempt from the ABC test. Whenever in doubt, employers and workers alike will benefit from seeking independent advice. This should be done if they are unsure about whether any exemptions apply to their unique situations.