Dynamex ABC Test

Dynamex ABC Test

The Dynamex ABC Test is a three-part test used in some states, notably California, to determine worker classification as either an employee or an independent contractor. The test examines whether the worker is free from the control and direction of the hiring entity, performs work outside the usual course of the hiring entity’s business, and is engaged in an independently established trade, occupation, or business. Passing the ABC Test typically indicates independent contractor status, while failing may suggest employee classification.

According to the California Labor & Workforce Development Agency website here, under the Dynamex ABC Test,

“…a worker is considered an employee and not an independent contractor, unless the hiring entity satisfies all three of the following conditions:

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

It’s important to work with a compliance partner such as Worksuite Global Engage to properly classify your employees and independent contractors, abide by the nuances of both Federal and State labor laws, and shield your organization from non-compliance penalties.