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What Is California Labor Code §2775 (The Dynamex / AB 5 ABC Test)?
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By Eman Yazdchi, Esq. · Certified Specialist in Workers' Compensation Law, State Bar of California Board of Legal Specialization · Cal Bar #285231
(b)(1) For purposes of this code and the Unemployment Insurance Code, and for the purposes of wage orders of the Industrial Welfare Commission, a person providing labor or services for remuneration shall be considered an employee rather than an independent contractor unless the hiring entity demonstrates that all of the following conditions are satisfied: (A) The person is free from the 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 fact. (B) The person performs work that is outside the usual course of the hiring entity's business. (C) The person is customarily engaged in an independently established trade, occupation, or business of the same nature as that involved in the work performed.
What does California Labor Code §2775 actually establish?
Section 2775 shifts the burden of proof to the hiring entity, it must prove the worker is a contractor rather than an employee, making employee status the legal default.
Section 2775 is the rule that establishes California's ABC test for determining whether a worker is an employee entitled to workers' compensation or an independent contractor, and it places the burden on the hiring entity to prove contractor status. Most gig workers are employees. Certified Specialist Eman Yazdchi (California Board of Legal Specialization, State Bar of California) applies the ABC test on every misclassification-defense file.
California Labor Code §2775 codifies the ABC test for California worker classification, the rule that decides whether a worker labeled "1099 independent contractor" is actually an employee entitled to workers' compensation coverage under California Labor Code §3351, California's coverage rule that reaches every worker regardless of immigration status. Under §2775, a California worker providing labor or services for remuneration is presumed an employee unless the hiring entity proves ALL THREE of (A) freedom from control, (B) work outside the hirer's usual course of business, and (C) the worker is customarily engaged in an independently established trade. The §2775 California ABC test interacts with the §2776, California's business-to-business carve-out, through §2785 industry-specific exemptions framework, which preserves certain pre-AB 5 carve-outs but does not displace the §3351 California presumption of employment in the comp setting.
What is the §2775 California "A" prong, freedom from control?
Prong A requires the hiring entity to prove the worker is free from control under the contract and in actual practice, a high bar for supervised gig workers.
Under California Labor Code §2775, the "A" prong requires the California hiring entity to prove the worker is free from the hirer's control and direction, both under the contract and in fact. Setting work hours, requiring specific methods, supervising the work, requiring exclusivity, or providing the tools and worksite all cut against the "A" prong. A California hiring entity that controls how the work is done, not just what result, fails §2775 "A" and the worker is an employee.
What is the §2775 California "B" prong, outside the hirer's usual business?
Prong B requires the work to be outside the hiring entity's usual course of business, the hardest prong to satisfy for delivery, rideshare, and logistics platform workers.
Under California Labor Code §2775, the "B" prong requires the California hiring entity to prove the worker's services are performed OUTSIDE the usual course of the hirer's business. A delivery driver for a delivery company is INSIDE the usual course, §2775 "B" fails and the worker is an employee. A plumber called to fix a leak at a software company is OUTSIDE the software company's usual course, §2775 "B" passes. The California "B" prong is often the hardest for gig-economy hirers to satisfy.
What is the §2775 California "C" prong, independently established trade?
Prong C requires the worker to be independently in business in the same trade, satisfied by established freelancers but rarely by single-platform gig or app-based workers.
Under California Labor Code §2775, the "C" prong requires the California hiring entity to prove the worker is customarily engaged in an independently established trade of the same nature as the work performed. The worker must actually be running an independent business, separate clients, business registration, capital investment. A worker who works only for this one hiring entity fails the §2775 "C" prong and is an employee.
How does §2775 connect to California workers' comp coverage under §3351?
Failing any single prong means the worker is an employee, and employees are entitled to full workers' compensation coverage for every work-related injury.
Under California Labor Code §2775 and California Labor Code §3351, a California worker correctly classified as an employee under the ABC test is automatically covered by workers' compensation, and California Labor Code §3351 extends coverage regardless of immigration status. A worker mislabeled "1099 contractor" who fails any one prong of §2775 is an employee for comp purposes, and the employer's California Labor Code §3700 insurance obligation applies.
The California Division of Labor Standards Enforcement (DLSE) 2024 enforcement report recovered more than $50 million in stolen wages from misclassified workers in construction, agriculture, garment, and gig sectors, the same economic cohort California Labor Code §2775 reaches. The CHSWC 2024 report estimates approximately 27% of California construction workers operate under contractors that misclassify or under-insure, exactly the ABC-test predicate. More context: the California workers' comp pillar and the general-contractor due-diligence rule under California Labor Code §2810 at the §2810 explainer.
Related on yazdchilaw.com: California workers' compensation lawyer pillar · California Labor Code §5400.30 explained · California Labor Code §3700.6 explained · what to do if you can't go back to work after a workers' comp injury.
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Tap to call →Frequently Asked Questions
What does California Labor Code §2775 actually establish?
California Labor Code §2775 codifies the Dynamex / AB 5 ABC test for California worker classification, the rule that decides whether a worker labeled "1099 independent contractor" is actually an employee entitled to workers' compensation coverage under California Labor Code §3351. Under §2775, a California worker providing labor for remuneration is presumed an employee unless the hiring entity proves ALL THREE of (A) freedom from control, (B) work outside the hirer's usual course of business, and (C) the worker is customarily engaged in an independently established trade.
What is the California §2775 "A" prong, freedom from control?
Under California Labor Code §2775, the "A" prong requires the California hiring entity to prove the worker is free from the hirer's control and direction, both under the contract and in fact. Setting work hours, requiring specific methods, supervising the work, requiring exclusivity, or providing tools and worksite all cut against the "A" prong. A hiring entity that controls how the work is done, not just what result is wanted, fails §2775 "A" and the worker is an employee under California law.
What is the §2775 California "B" prong, outside the hirer's usual business?
Under California Labor Code §2775, the "B" prong requires the California hiring entity to prove the worker's services are performed OUTSIDE the usual course of the hirer's business. A delivery driver for a California delivery company is INSIDE the usual course, §2775 "B" fails and the worker is an employee. A plumber called to fix a leak at a software company is OUTSIDE the software company's usual course, §2775 "B" passes. The California "B" prong is often the hardest for gig-economy hirers to satisfy.
What is the §2775 California "C" prong, independently established trade?
Under California Labor Code §2775, the "C" prong requires the California hiring entity to prove the worker is customarily engaged in an independently established trade of the same nature as the work performed. The California worker must actually be running an independent business, separate clients, business registration, advertising, capital investment. A worker who works only for this one hiring entity, with no independent California operation, fails the §2775 "C" prong and is an employee.
How does California §2775 connect to workers' comp coverage under §3351?
Under California Labor Code §2775 and California Labor Code §3351, a California worker correctly classified as an employee under the ABC test is automatically covered by workers' compensation, and California Labor Code §3351 extends California coverage regardless of immigration status. A worker mislabeled "1099 contractor" but who fails any one prong of the §2775 ABC test is an employee for comp purposes, and the employer's California Labor Code §3700 insurance obligation applies. Misclassification is the central California pathway for gig and "1099" workers to comp coverage.
Last reviewed by Eman Yazdchi, Esq., June 2026.
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