The U.S. Court of Appeals for the Ninth Circuit has ruled the new standard that determines what constitutes an “employee” now applies retroactively.
The May 2 decision of the Ninth Circuit, in Vasquez v. Jan-Pro Franchising, Inc., has major implications for California employers who rely on independent contractors, including pool service companies and builders.
The decision means that the legal test created by the California Supreme Court in the Dynamex decision that makes it more difficult to classify a worker as an independent contractor, may now be applied not only to cases going forward, but also disputes from up to four years before the test was created.
The “ABC” test helps employers determine whether a worker is legally an employee or can be classified as an independent contractor. To prove that the worker isn’t an employee, a company needs to show: (A) the worker controls his own work; (B) the worker performs work outside of the scope of the company’s normal business; and (C) the worker works in an independently established occupation.