How One Court Case Changed Everything for California Workers
In 2018, the California Supreme Court issued a decision that sent shockwaves through the gig economy and beyond. Dynamex Operations West v. Superior Court didn't just tweak the rules—it completely overhauled how California determines who's an employee and who's an independent contractor.
The Old Way: Borello's Balancing Act Before Dynamex, courts used the Borello multi-factor test, weighing various elements without requiring any single factor. This gave businesses significant flexibility in classifying workers as contractors.
The New Way: ABC or Employee The ABC test flips the script entirely. Now, workers are presumed to be employees unless the business proves ALL THREE prongs:
A: The worker is free from control and direction
B: The work is outside the usual course of business (this is where most companies fail)
C: The worker has an independently established trade or business
Why Prong B Matters Most If you deliver packages for a delivery company, drive passengers for a ride-share service, or perform any core function of the business, you almost certainly fail Prong B. That alone makes you an employee, regardless of the other factors.
Real Impact This isn't just legal theory. The decision:
Applies retroactively to pending cases
Opened the door to class action litigation
Led to Assembly Bill 5 (AB 5) codifying the test
Gave workers access to minimum wage, overtime, benefits, and legal protections they were previously denied
What It Means for You If you're classified as an independent contractor but:
Work for just one company
Follow their schedule and rules
Perform work central to their business
You might actually be an employee entitled to significantly more protections and compensation.
The label your employer uses doesn't control the analysis—the actual working relationship does.
