Calif. Supreme Court Transforms Test for Who Is an Employee (1)

California workers and companies have a new test to determine whether someone should be classified as an employee or independent contractor under state law.

The state supreme court said in an April 30 ruling that a three-factor “ABC” classification is the correct test under state law, shifting from a separate standard that looked at nearly a dozen different factors.

“It’s a bombshell,” Richard Reibstein, a partner at Locke Lord LLP in New York, told Bloomberg Law. “It will require hundreds of thousands of companies in California that lawfully created independent contractor relationships to reevaluate their classifications.”

“Many companies have built ...