--- title: California Adopts “ABC Test” for Independent Contractors description: In the Dynamex ruling, the California Supreme Court issued a new standard for determining whether workers should be classified as employees or as independent contractors. The “ABC Test” must now be used to prove that a worker is an employee or an independent contractor. image: https://blog.populusgroup.com/hubfs/California%20Independent%20Contractors-1200.jpg --- [![PopulusGroup_Plane_Logo_rgb-01](https://blog.populusgroup.com/hs-fs/hubfs/PG%20Registered%20Logos/PopulusGroup_Plane_Logo_rgb-01.png?width=1966&height=1530&name=PopulusGroup_Plane_Logo_rgb-01.png "PopulusGroup_Plane_Logo_rgb-01")](https://www.populusgroup.com/en) - [Employers](https://www.populusgroup.com/en/workforce-solutions) - [Careers](https://www.populusgroup.com/en/job-seeker) - [Contractors](https://www.populusgroup.com/en/contractor-resources) - [Blog](https://blog.populusgroup.com) - [About](https://www.populusgroup.com/en/about) - [Impact](https://www.populusgroup.com/en/impact) - [Work With Us](https://www.populusgroup.com/en/contact) [The PG Blog](https://blog.populusgroup.com) Search Search this site on Google Search Google Subscribe ### Subscribe to Email Updates Select Category - 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[Megan Anderson (1)](https://blog.populusgroup.com/author/megan-anderson) - [Michelle Fedorkiw (1)](https://blog.populusgroup.com/author/michelle-fedorkiw) - [Kimberly Mills (1)](https://blog.populusgroup.com/author/kimberly-mills) - [Denis Kenny (1)](https://blog.populusgroup.com/author/denis-kenny) - [Tim Wang (1)](https://blog.populusgroup.com/author/tim-wang) # California Adopts “ABC Test” for Independent Contractors [![Darwin Morgan](https://blog.populusgroup.com/hubfs/2018%20Fathers%20Day/Westin%2c%20Sienna%20and%20Darwin%20Morgan-260227-edited.png)](https://blog.populusgroup.com/author/darwin-morgan) [by Darwin Morgan](https://blog.populusgroup.com/author/darwin-morgan) ![California Independent Contractors-1200](https://blog.populusgroup.com/hs-fs/hubfs/California%20Independent%20Contractors-1200.jpg?width=761&name=California%20Independent%20Contractors-1200.jpg) Managing an IC population is kind of like owning a car: you’re never truly done with the maintenance. It requires consistent attention and expertise. In the complex world of ICs, there are always new rulings that can make a big impact. This summary will catch you up to speed with California’s recent Dynamex ruling and what it means for your temporary workforce. ## The Dynamex Ruling Summary On April 30, 2018 in [**Dynamex Operations West, Inc. v. Superior Court**](http://www.courts.ca.gov/opinions/documents/S222732.PDF) the California Supreme Court issued its ruling **clarifying the standard for determining whether workers should be classified as employees or as independent contractors.** This ruling established the “ABC Test” to prove that a worker is an employee or an independent contractor for wage and hour claims under the Industrial Welfare Commission (IWC) Wage Orders. ## The Key Take-Aways: - The ruling puts the burden of proof on the hiring entity to classify an IC worker. - It requires that companies cannot classify a worker as an IC to generate cost savings to a business. (Dynamex had moved all of their W2 employees to IC status to avoid paying payroll taxes) ## The “ABC Test” When it comes to the burden of proof, **hiring entities must ensure that each of the criteria in the ABC Test is met for the IRS to classify the worker as an IC i**n the state of California: 1. The worker is **free from the control and direction of the hirer in connection** **with the performance of the work**, both under the contract for the performance of such work and in fact; 2. The worker **performs work that is outside the usual course** of the hiring entity’s business; and 3. The worker is **customarily engaged in an independently established trade**, occupation, or business of the same nature as the work performed for the hiring entity. ## The Impact Companies working with ICs should verify internally that they are following the ABC Test and may want to re-audit any potential direct IC’s they have to ensure they meet the qualifications. For companies already working Populus Group, rest easy. We have always executed the ABC Test as a standard best practice to determine proper classification for the ICs in our Agent of Record Program. You can simply cross this off the list of things to worry about. (Just remember to check the last time you got your oil changed.) [![Like this Post? Download the PDF!](https://no-cache.hubspot.com/cta/default/450029/ed230d7f-5299-4332-8806-f9262aba5988.png)](https://cta-redirect.hubspot.com/cta/redirect/450029/ed230d7f-5299-4332-8806-f9262aba5988)   [![subscribe to the PG Blog for more good stuff!](https://no-cache.hubspot.com/cta/default/450029/bd56563b-e1a2-4e08-841f-6d841390eeee.png)](https://cta-redirect.hubspot.com/cta/redirect/450029/bd56563b-e1a2-4e08-841f-6d841390eeee) ## Leave a comment [![Darwin Morgan](https://blog.populusgroup.com/hubfs/2018%20Fathers%20Day/Westin%2c%20Sienna%20and%20Darwin%20Morgan-260227-edited.png)](https://blog.populusgroup.com/author/darwin-morgan) Written by [Darwin Morgan](https://blog.populusgroup.com/author/darwin-morgan) Darwin is the IC Compliance Manager at Populus Group. He’s responsible for the supervision, leadership, and development of the IC Compliance Team. With their eagle eye on all things IC, our partners maintain rock solid compliance. When he’s not at work, you can find him jamming out with his wife Lisa, and two kiddos, Westin and Sienna. ### Related posts ###### [Independent Contractor Compliance (ICC)](https://blog.populusgroup.com/topic/independent-contractor-compliance-icc) [Summer 2024 Compliance Roundup](https://blog.populusgroup.com/summer-2024-compliance-updates) [![Jen Pasquier](https://blog.populusgroup.com/hubfs/jen%20pasquier-1.png) Jen Pasquier](https://blog.populusgroup.com/author/jen-pasquier) ###### [Independent Contractor Compliance (ICC)](https://blog.populusgroup.com/topic/independent-contractor-compliance-icc) [3 Workforce Trends Transforming Contingent Labor in 2024](https://blog.populusgroup.com/3-workforce-trends-transforming-contingent-labor-in-2024) [![Austin McCool](https://blog.populusgroup.com/hubfs/Austin%20McCool-1.png) Austin McCool](https://blog.populusgroup.com/author/austin-mccool) ###### [Independent Contractor Compliance (ICC)](https://blog.populusgroup.com/topic/independent-contractor-compliance-icc) [Is Your Contractor Really an Employee? What the 2024 DOL Rule Says](https://blog.populusgroup.com/is-your-contractor-really-an-employee-what-the-2024-dol-rule-says) [![Jaylynn Hogeboom](https://blog.populusgroup.com/hubfs/Jaylynn%20Buckley.png) Jaylynn Hogeboom](https://blog.populusgroup.com/author/jaylynn-hogeboom) **Corporate Headquarters** Populus Group, Troy Headquarters 3001 West Big Beaver Road Suite 608 Troy, MI 48084 [248-712-7900](tel:248-712-7900) [opportunities@populusgroup.com](mailto:opportunities@populusgroup.com) **Employment Verification Requests\*** [248-928-0530](tel:248-928-0530) [voe@populusgroup.com](mailto:voe@populusgroup.com) [Employer Services](http://www.populusgroup.com/en/workforce-solutions)[Begin Your Job Search](http://www.populusgroup.com/en/job-seeker) ©2023 Populus Group [Privacy Policy](http://www.populusgroup.com/en/privacy-policy)[Terms & Conditions](http://www.populusgroup.com/en/terms-conditions)[Site Map](http://www.populusgroup.com/en/sitemap) [![](https://blog.populusgroup.com/hubfs/Images/blog/icon-social-fb%20png.png?h=28&la=en&w=28)](https://www.facebook.com/populusgroup) [![](https://blog.populusgroup.com/hubfs/Images/blog/icon-social-twitter%20png.png?h=28&la=en&w=28)](https://twitter.com/populusgroup) [![](https://blog.populusgroup.com/hubfs/Images/blog/icon-social-instagram%20png.png?h=28&la=en&w=28)](https://www.instagram.com/populusgroup/) [![](https://blog.populusgroup.com/hubfs/Images/blog/icon-social-li%20png.png?h=28&la=en&w=28)](https://www.linkedin.com/company/70117/) [![](https://blog.populusgroup.com/hubfs/Images/blog/icon-social-glassdoor%20png.png?h=28&la=en&w=28)](https://www.glassdoor.com/Overview/Working-at-Populus-Group-EI_IE259242.11,24.htm) [![](https://blog.populusgroup.com/hubfs/Images/blog/icon-social-youtube%20png.png?h=28&la=en&w=39)](https://www.youtube.com/channel/UC-O9v1hz-Q4OW0Ze0b9O_sg) [![](https://blog.populusgroup.com/hubfs/Images/blog/icon-social-gplus%20png.png?h=28&la=en&w=28)](https://plus.google.com/u/0/102588349136181669410) ![](https://blog.populusgroup.com/hubfs/Images/blog/icon-top%20png.png?h=33&la=en&w=33)