Independent contractor

What does “independent contractor” mean?

An independent contractor is a worker engaged to deliver a result rather than to be directed in how the work is done, and in California the classification is decided by the working relationship in practice, not by the agreement that names it.

California applies the ABC test to most classifications, which requires the hiring entity to establish all three of: freedom from control, work outside the usual course of the hiring entity's business, and an independently established trade of the same nature.

The second element is the one that defeats most arrangements. A contractor doing the company's core work is difficult to classify as a contractor no matter how the contract reads.

Why it matters to an employer

A signed contractor agreement is not a defense. It is evidence of intent, and intent is not the test.