Can I classify California employees as independent contractors?

California law makes it difficult to classify workers as independent contractors, particularly under the “ABC test” established by Assembly Bill 5 (“AB 5”). A worker is generally presumed to be an employee unless the hiring entity can satisfy all elements of the applicable legal test or establish a statutory exemption. Where the ABC test does not apply, California courts often analyze the relationship under the multi-factor “Borello test,” which focuses primarily on the degree of control exercised over the worker and other weighted factors.

Misclassification can expose businesses to significant liability for unpaid wages, taxes, penalties, employee benefits, and attorneys’ fees under both California and federal law. It may also result in costly class or collective action litigation, making it critical for businesses to have independent contractor relationships and agreements carefully reviewed by experienced counsel before implementation.

Great question and not to sound like a pompous attorney my friend, your answer is within your question.

The very nature of saying "can I classify an employee" as an independent contractor is a yellow or likely red flag.

California's statutes and regulations are very onerous when it comes to misclassification.  There are massive impacts and negative consequences when this is done improperly.

In law school, as a student, we were taught to answer these types of questions with, "it depends..." and now that I teach business law classes at USC Gould School of Law, my students are encouraged to do the same.

In short, California has become more stringent (in February of 2020, right before COVID incidentally) about misclassification.  You can view various regulations online and here's my short advice.  Remember the saying, "if it looks like a duck, walks like a duck and talks like a duck, it's probably a duck!"?  The same applies here.  

IF the individual has their own business that was already in existence, IF they were already providing similar services to others, IF they continue to provide other similar services to others, IF you pay an entity (not an individual) and IF they have their own equipment/set their own hours/are their own boss --- well then they perhaps may qualify as in independent contractor.

Our office works with companies and employers on these matters routinely, feel free to reach out with quesitions or comments.