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Hastings Business Law Journal

Abstract

The ABC test has increasingly become a tool to differentiate employees from independent contractors. Companies and counsel throughout the nation have grappled with Part B of this test, which requires a determination of the hiring entity’s “usual course of business.” Adjudicators have provided little guidance on how to conduct this analysis and are admittedly frustrated with this “elusive concept.” Yet a thorough treatment of the analytical framework and guiding principles of Part B of the ABC Test has not been put forth.

This article fills this void in scholarship. By tracing the relevant concepts to the common law control test, and more importantly, a lesserknown framework analyzing skill and integration to determine liability, in addition to articulating the genesis and proliferation of the ABC Test within unemployment insurance legislation, this article answers a call from the judiciary to locate the origins of the ABC Test. Assessing decisions from state supreme courts and intermediate appellate bodies, this article then examines three methods courts use to determine whether work was done outside the usual course of the hiring entity’s business. The principal insight of this article is that work which is in the hiring entity’s usual course of business is work which provides regular aid to the business. This article concludes by analyzing two related questions within the Part B framework: (1) whether the Part B test is work-specific or worker-specific, a question of salience given the use of class actions, and (2) how to describe the hiring entity’s business, a question of import due to the rise of the gig economy.

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