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One of the biggest questions my clients want to know is, When can I use independent contractors, and when should I really be hiring employees directly?

Whenever I’m talking to my clients about classifying workers as employees or independent contractors, I bring up the ABC Test. What is it?!

Well… glad you asked! The ABC Test, is so named, because there are 3 parts to it.  It’s as simple as ABC… and in a nutshell… it makes it much more difficult to classify workers as independent contractors.

In order for the worker to be properly classified as an independent contractor, all three of the following statements must be true.

A: The work is free from the control and direction of the company in connection with the performance of the work, both under the contract for performance of the work and in fact.
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B: The worker performs work that is outside the usual course of the company’s business.

C: The worker is customarily engaged in an independently established trade, occupation, or business of the same nature as that involved in the work performed.

The California Supreme Court has told us that the ABC test, is the standard to use in April 2018, and although it has been challenged, as of the writing of this post, it is still the standard today. There are about 3 weeks left in the legislative session. I’m closely watching to see if some of the exemptions that are proposed will be passed. We shall see!

Many cities in California have their own local ordinances relating to minimum wage. Soon, two Sonoma County Cities will have a minimum wage that is higher than the state minimum wage. The first is the city of Sonoma. Effective January 1, 2020 the Sonoma Minimum Wage Ordinance (MWO) will take effect. It will be $13.50 per hour for employers with 26 or more employees, and for smaller employers with 25 or fewer employees, the MWO will be $12.50.

The Petaluma City Council voted to adopt the following MWO’s, also effective January 1, 2020. $15.00 per hour for employers with 26 or more employees and $14.00 for those employers with 25 or fewer employees.

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Santa Rosa and Sebastopol have also been considering whether to adopt local minimum wage ordinances. Currently effective January 1, 2020, the state minimum wage will go up to $12.00 an hour for larger employers, and $11.00 an hour for smaller employers, for all California cites that do not have their own local ordinances stating a higher hourly wage.