ABC-test evidence file
abc-test-evidenceDomain: worker-classificationType: policyDescription
California's ABC test is the contemporary standard for worker classification in California and a widening list of US states that adopted it after Dynamex Operations W. Inc. v. Superior Court (2018) and the subsequent statutory codification in AB5. The evidentiary record demonstrates, for each worker classified as a contractor rather than an employee, a file demonstrates, prong by prong, that the classification holds. The work product is contemporaneous documentation (engagement letters, independent-business evidence, scope-of-work definitions, evidence of the worker's other clients), not a litigation packet assembled retroactively after an audit notice arrives. The three prongs decompose into asymmetric difficulty. Prong A (freedom from control and direction in the performance of work) is the prong the engagement contract addresses; carefully drafted contractor agreements that disclaim instruction on means and methods of work usually carry this one. Prong C (the worker is customarily engaged in an independently established trade or occupation of the same nature) is fact-intensive but typically demonstrable through evidence of the worker's other clients, business registration, or trade licensure. Prong B (the work is outside the usual course of the hiring entity's business) is the litigation-active piece and the one that breaks the most classifications; courts have read "usual course of business" broadly, which is why platform-mediated work in California has largely converged on either employee classification or one of the AB2257 carve-outs or the Prop 22 app-based-driver framework rather than relying on a contested Prong B defense. The exemption regime added by AB2257 covers more than 200 industry-specific categories (freelance writers under a 35-submission threshold, licensed professionals, business-to-business contracting relationships under specified conditions), and the practical question for most platforms is whether any exemption fits cleanly rather than whether the ABC test itself can be satisfied. The statutory anchors are Cal. Lab. Code §2775 (the ABC test as codified by AB5), §§2776 to 2785 (the AB2257 industry-specific exemptions), and §226.8 (the misclassification penalty regime). Failing the test exposes the operator to retroactive wage-and-hour reclassification under the Labor Code, unpaid payroll-tax assessment under the Unemployment Insurance Code, and §226.8 willfulness-based penalties that scale with the population of misclassified workers; PAGA representative-action exposure is the multiplier that makes the underlying liability material at platform scale. Massachusetts (Mass. Gen. Laws ch. 149 §148B, interpreted in Sebago v. Boston Cab Dispatch (2014)) and New Jersey (N.J. Stat. Ann. §43:21-19(i)(6), interpreted in Hargrove v. Sleepy's (NJ Supreme Court 2015)) operate parallel ABC-style frameworks with broadly similar evidence demands. The federal economic-realities test under 29 CFR §795.110 sits beside these as a separate FLSA-side analysis applied per engagement rather than per worker, and the federal and state findings can diverge on the same population. Counsel sign-off on the evidentiary file before the platform reaches scale is the cheapest defensive posture; the alternative is reconstructing the record under audit conditions, which has structurally never worked well.
Applicability
Applies when: business participants include individual-workers AND markets include california or US.
Required by (5 regulations)
- CA AB5
Cal. Lab. Code §2775 — document control freedom, outside-usual-course-of-business, independent-trade evidence.
Cal. Lab. Code §2775
- CA AB2257
Cal. Lab. Code §§2776-2785 — exemption-applicability evidence.
Cal. Lab. Code §§2776-2785
- MA Question 3 / IC Statute
Mass. Gen. Laws ch. 149 §148B — Sebago v Boston Cab Dispatch (2014) interpretive framework.
Mass. Gen. Laws ch. 149 §148B
- NJ Misclassification
N.J. Stat. Ann. §43:21-19(i)(6) — Hargrove v Sleepy's (NJ Supreme Court 2015) framework.
N.J. Stat. Ann. §43:21-19(i)(6)
- FLSA Economic Realities
29 CFR §795.110 — six-factor evidence per engagement.
29 CFR §795.110
Fulfilled by (1)
- In-house build · high effort
Magist does not accept payment from vendors. Methodology.
Evidence formats
- ABC-test evidence file (per-worker or per-cohort)
- control-test memo
- usual-course-of-business memo