California Workers' Compensation Law Test

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January 19, 2015

This six-factor test is applicable in California workers' compensation cases under S.G. Borello & Sons, Inc.3 Several other states also follow this six-factor test as their common law analysis of worker status. Factors under this test include the following:

(a) Control. When the hiring firm has a right to exercise control, it is a strong indication that the person is an employee.

(b) Opportunity for profit or loss. If the worker stands to either profit from the relationship or lose money for an incomplete job, there is an inference of an independent contractor relationship is created.

(c) Investment in facilities or employment of assistants. If a worker invests in his own working facilities, away from the company's facilities and/or hires his own employees, there is an inference of the existence of an independent contractor relationship.

(d) Need for special skills. The more skill a worker must possess to do the particular job, the greater the inference of independent contractor relationship.

(e) Permanence of relationship. The shorter the relationship between the hiring firm and the worker, or the more irregular the intervals of work if the relationship is ongoing, the greater the inference that an independent contractor relationship exists.

(f) Integration into hiring firm's business. If success of the business depends on the worker's services, the worker might be deemed an employee.

3 48 Cal.3d 341(1989).

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About the author:
• Partner with Hanson Bridgett LLP • Focuses on employment, labor and benefits litigation, with an emphasis on defense of complex employment disputes • Conducts wage and hour audits and advises on compliance • Substantial class action experience in wage and hour, pension and retiree health cases • Represented employers in the transportation, life sciences, utility, manufacturing, health care and financial industries, as well as public sector clients • Successfully litigated a number of wage and hour class actions involving alleged violations of meal and rest breaks, and alleged misclassification of employees as independent contractors • Currently litigating an independent contractor, alleged misclassification class action case in the transportation industry • J.D. degree, cum laude, University of California, Hastings College of the Law; M.A. degree, University of Minnesota; B.A. degree, University of Minnesota

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