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California adopts a strict definition of independent contractor

Construction is big business in California, and that leads to a lot of legal requirements for large companies to do business in development. Fortunately, that is nothing new, as California has been experiencing construction booms for more than a century. New conditions are always arising, however, like the push to build more multifamily units near transit hubs to reduce urban sprawl.

One factor that has always interested construction managers and their lawyers is who is a legal employee and who is not. This is important because firms hired to build large-scale projects or even individual homes often have contractors and subcontractors doing large parts of the work, like plumbing and electrical installations.

Some labor lawyers and observers have been concerned that builders use the definition of contractor to hire someone without the expense of core protections for employees. This may include workers’ compensation insurance or various expenses related to taxes.

California now uses a strict test to define a worker as an independent contractor, named the ABC Test for its three main points. An independent contractor must be doing work outside a company’s normal scope. They must also normally work as part of a business other than the hiring contractor and they must also be self-managed, doing work beyond the specific direction of the contractor.

Workers and employers who have questions about the nature of their legal relationship can always rely on legal representation. An attorney can advise on the best way to claim workers’ compensation benefits or secure other help with benefits that are legally required for various types of workers.