AB5 / Independent Contractor Test
Definition. AB5 is California's strict employee-classification law using the ABC test. Has been a major driver of Workers Comp + Pro Liab audit risk for booth-renters and gig economy workers.
Also known as: AB5, ABC Test, AB2257
The ABC test classifies a worker as an employee unless ALL three apply: (A) Free from control, (B) Service outside the usual course of the hiring entity's business, (C) Customarily engaged in independently established trade. Most states use similar but less-strict tests. New Jersey, Massachusetts also aggressive.
Sources cited
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Reviewed by California-licensed Property & Casualty insurance agent
Jason Wootton (CA License #0I94454). Not insurance advice, an individual recommendation, or a solicitation in any state. Insurance regulations vary by state. For specific coverage decisions, consult a licensed insurance agent in your state.
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