Is AB5 the same as the ABC test?

Not exactly. The ABC test is the legal standard for classification. AB5 is the California law that made that test the state's default rule in 2019. The test came first, in the 2018 Dynamex ruling, and AB5 gave it statutory force and extended its reach.

Does AB5 apply outside California?

No. AB5 is a California state law and applies only to workers in California. Other states set their own rules; some use a version of the ABC test, others do not. Federal wage law uses a separate economic reality test. A worker elsewhere must be classified under the rules that apply there.

Which workers are exempt from AB5?

The law exempts a long list of occupations and arrangements, including certain licensed professionals such as lawyers, doctors and accountants, and some business-to-business, referral and professional-services relationships. Exempt workers are assessed under the older Borello test, which weighs several factors rather than requiring all three ABC prongs.

How can a business hire in California without misclassification risk?

Assess each worker against the ABC test, or the Borello test if an exemption applies, before engaging them. Where the work is part of your core business or needs ongoing direction, employing the person, directly or through an employer of record, is usually safer than a contractor arrangement.

Glossary

AB5 (California Assembly Bill 5)

AB5 is a California law, in force since 2020, that made the ABC test the default rule for deciding whether a worker is an employee or an independent contractor across most of the state's labour, wage and unemployment provisions.

Reviewed by Teamed's in-house employment-law team·Last updated 28 July 2026

Also known as: California Assembly Bill 5, Labor Code section 2775

What is AB5 (California Assembly Bill 5)?

AB5, formally California Assembly Bill 5, is a state law signed in September 2019 and in force from January 2020. It made the strict ABC test the default standard for deciding whether a worker in California is an employee or an independent contractor, tightening rules that had let many workers be treated as contractors.

The law wrote into statute a test the California Supreme Court had adopted in its 2018 Dynamex decision. Under the ABC test, a worker is presumed an employee unless the hiring business proves all three prongs: the worker is free from its control, does work outside its usual business, and runs an independent trade.

AB5 also carved out many exemptions. Some occupations, including certain licensed professionals and specified business relationships, are judged under the older, more flexible Borello test rather than the ABC test. Later amendments and a ballot measure adjusted how the law applies to particular industries.

What did AB5 change?

AB5 made the ABC test the default rule across most of California's employment provisions, including the Labor Code, wage orders and unemployment insurance. Because the ABC test is strict, the law reclassified many workers who had been treated as contractors, notably in the gig economy, as employees entitled to wage and benefit protections.

How does AB5 relate to the Dynamex ruling?

AB5 codified Dynamex. In 2018 the California Supreme Court, in Dynamex Operations West v. Superior Court, adopted the ABC test for wage-order claims. AB5 then wrote that test into statute in 2019 and extended it to more parts of California law, giving it broader and firmer legal force.

Who is exempt from AB5?

AB5 lists many exemptions. Certain licensed professionals, such as lawyers, doctors, accountants and architects, along with some specified business-to-business and referral arrangements, fall outside the ABC test. For them, classification is judged under the older Borello multi-factor test, though the hiring business must still show contractor status is appropriate.

Key facts

AB5 signed into law: California signed AB5 on 18 September 2019, effective 1 January 2020The law codified the ABC test adopted in the California Supreme Court's 2018 Dynamex decision.Source: California Legislative Information· verified 2026-07-28
Codified in the California Labor Code: AB5's ABC test is codified at Labor Code section 2775, with exemptions in the sections that followExempt occupations and specified business relationships are judged under the older Borello multi-factor test instead.Source: California Legislative Information· verified 2026-07-28

ABC test vs Borello test under California law

	ABC test	Borello test
Applies to	Most workers after AB5	Exempt occupations and relationships
Approach	Three prongs, all required	Multiple factors weighed together
Starting point	Worker presumed an employee	No presumption; control is central

Frequently asked questions

Is AB5 the same as the ABC test?
Not exactly. The ABC test is the legal standard for classification. AB5 is the California law that made that test the state's default rule in 2019. The test came first, in the 2018 Dynamex ruling, and AB5 gave it statutory force and extended its reach.
Does AB5 apply outside California?
No. AB5 is a California state law and applies only to workers in California. Other states set their own rules; some use a version of the ABC test, others do not. Federal wage law uses a separate economic reality test. A worker elsewhere must be classified under the rules that apply there.
Which workers are exempt from AB5?
The law exempts a long list of occupations and arrangements, including certain licensed professionals such as lawyers, doctors and accountants, and some business-to-business, referral and professional-services relationships. Exempt workers are assessed under the older Borello test, which weighs several factors rather than requiring all three ABC prongs.
How can a business hire in California without misclassification risk?
Assess each worker against the ABC test, or the Borello test if an exemption applies, before engaging them. Where the work is part of your core business or needs ongoing direction, employing the person, directly or through an employer of record, is usually safer than a contractor arrangement.

Related terms

Note

This is general information, not legal advice. Statutory rules vary by country and change over time.

Glossary

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Last verified 2026-07-28