What is ABC test?

The ABC test is a strict standard for classifying workers, used by many states (most prominently California under AB5) for unemployment and wage purposes. A worker is an independent contractor only if all three conditions are met: (A) the worker is free from the company's control in performing the work; (B) the work is outside the company's usual course of business; and (C) the worker is customarily engaged in an independent trade of the same kind.

Part B is the hardest to satisfy: if the work is central to what the business does, the worker is almost always an employee. States that have not adopted the ABC test typically use the more flexible common-law control test or an economic-reality test instead.