Earlier this month, the California Labor Commissioner’s Office filed its first lawsuit to enforce AB 5, which requires employers to use the “ABC” test to determine if workers in California are employees or independent contractors. In the lawsuit, a gig-economy car wash company in Southern California is being sued for misclassifying at least 100 workers as independent contractors.
As you may recall, under the ABC test, an individual is presumed to be an employee unless the company can prove all of the following:
That the worker is free from control and direction of the hiring entity in connection with the performance of the work, both under the contract for the performance of the work and in actually performing the work; and
That the worker performs work that is outside the usual course of the hiring entity’s business; and
That the worker is customarily engaged in an independently established trade, occupation or business of the same nature as the work performed.
The car wash company offers car washing and detailing to customers through its phone app, but it requires workers to use their own cars and buy their own uniforms, cleaning equipment, insurance, supplies and gas, while not reimbursing workers for these business expenses or travel time. Read More