What Is California Labor Code §3356: The Side Business Test?

As used in subdivision (d) of Section 3351 and in Section 3355, the term “trade, business, profession, or occupation” includes any undertaking actually engaged in by the employer with some degree of regularity, irrespective of the trade name, articles of incorporation, or principal business of the employer.

What does Labor Code 3356 actually decide?

It decides whether a homeowner even has a business for the household worker rule, separate from whether a given chore serves that business.

Two other sections set up the real question. Labor Code 3351(d) covers a household employee: someone hired for duties tied to the home, or for personal tasks. It does not cover someone hired for the owner's trade or business. Labor Code 3355 asks which tasks count as serving that trade or business. Section 3356 answers an earlier question instead. How established does the owner's activity have to be before it even counts as a trade or business? Not very established. A monthly habit of renting out a spare room, selling handmade goods online, or repairing cars for pay can already qualify. It can qualify long before it looks like a real company.

How regular does a side activity have to be to count as a business?

The statute asks only for some degree of regularity. It sets no minimum number of times or dollars, so a repeated side activity can qualify quickly.

A single, one time favor is different. Helping a neighbor move, or selling an old couch once, is not an undertaking done with regularity. A standing arrangement is not the same thing. Renting a unit out every month shows a pattern. So does listing items for sale on an ongoing basis, or taking paying repair jobs most weekends. The statute sets no fixed number of rentals or sales. A workers' compensation judge looks at the real pattern of the owner's activity instead.

Does it matter if the homeowner has no license, business name, or company?

No. The statute reaches an activity no matter what it is named, whether it is incorporated, or whether it is the owner's main source of income.

A homeowner does not need a business name filing. A contractor's license is not required either, and neither is a formal company. None of those are needed to run a trade or business under this section. A teacher who regularly flips furniture on weekends can qualify. So can a retiree who regularly breeds dogs for sale, or a family that regularly rents out a converted garage, even though none of them would call themselves a business owner. It also does not matter that the activity is not the owner's main job.

Why does this change a worker's coverage?

A worker doing a task for the owner's business is covered from the first hour. A worker doing a purely personal chore can fall into a narrow exemption instead.

Labor Code 3352(a)(8) can leave out a household worker, the kind Labor Code 3351 describes in its subdivision (d). That exemption looks at the 90 days before the injury. It applies if the job was under 52 hours. It also applies if the job paid 100 dollars or less. That exemption is written only for personal household duties. Once a task serves a trade or business under this section, the usual coverage rules apply instead. There is no hour or pay minimum, starting from the worker's first day on that task.

How does this section connect to the rest of the household worker test?

Three sections work together here: one says who is a household employee, one says which tasks belong to the owner's business, and this one says what counts as a business in the first place.

Labor Code 3351(d) starts the analysis. It defines a household employee. Labor Code 3355 asks whether a specific chore served the owner's trade or business, such as maintaining a rental unit or a work vehicle. Labor Code 3356 answers the question both of those sections depend on: what counts as that trade or business to begin with. A homeowner can run no formal business at all and still meet this test, simply by doing the same kind of paid activity again and again.

What should you save if your work might count as business work?

Save whatever shows the activity repeats: listings, schedules, payment history, and how long it has been going on.

Write down how often the owner's side activity happens. Note how long it has been running. A rental listing can show regularity. So can an online shop page, appointment messages, or a pattern of deposits, none of which need a business license to count. Note what you were asked to do, and whether it served that ongoing activity rather than the family's daily life. Our pages for domestic workers and day laborers cover the more common injury fact patterns on each side of this line.

Whether a homeowner's side activity counts as a business can decide whether the narrow household worker hour and pay limits even apply to your claim. Yazdchi Law P.C. reviews the actual work performed and how often the homeowner's activity ran, in each matter individually. Call (661) 273-1780 or use the contact form to talk through your situation.