THE BORELLO TEST
- WHAT IS THE BORELLO TEST?
In S.G. Borello & Sons, Inc. v. Dept. of Industrial Relations, the California Supreme Court established a series of factors, known as the Borello test, to determine whether a California worker is an employee or an independent contractor. 48 Cal.3d 341 (1989). The test relies on the following factors to determine whether an employer exerted the necessary control over the manner and means of accomplishing desired result [although such control need not be direct, actually exercised, or detailed]:
- Whether the worker performing services holds themselves out as being engaged in an occupation or business distinct from that of the employer;
- Whether the work is a regular or integral part of the employer’s business;
- Whether the employer or the worker supplies the instrumentalities, tools, and the place for the worker doing the work;
- Whether the worker has invested in the business, such as in the equipment or materials required by their task;
- Whether the service provided requires a special skill;
- The kind of occupation, and whether the work is usually done under the direction of the employer or by a specialist without supervision;
- The worker’s opportunity for profit or loss depending on their managerial skill;
- The length of time for which the services are to be performed;
- The degree of permanence of the working relationship;
- The method of payment, whether by time or by the job;
- Whether the worker hires their own employees;
- Whether the employer has a right to fire at will or whether a termination gives rise to an action for breach of contract; and
- Whether or not the worker and the potential employer believe they are creating an employer-employee relationship (this may be relevant, but the legal determination of employment status is not based on whether the parties believe they have an employer-employee relationship).
WEIGHING OF THE BORELLO FACTORS
The Borello test is referred to as a “multifactor” test because, in reaching the classification determination, a court will weigh all potentially relevant facts to the factors provided above – wherein no single factor is dispositive of the final determination. In fact, the courts have emphasized that different factors weigh more or less depending on the facts and circumstances of each given case.
For example, where the employer does not control the work details, an employee-employer relationship may be found if:
- The employer retains control over the operation as a whole;
- The worker’s duties are an integral part of the operation; and
- The nature of the work makes detailed control unnecessary.
Yellow Cab Cooperative, Inc. v. Workers’ Compensation Appeals Board, 226 Cal.App.3d 1288 (1991).
The California Supreme Court explained that Borello “emphasizes statutory purpose as the touchstone for. Deciding whether a particular category of workers should be considered employees rather than independent contractors for purposes of social welfare legislation.” Dynamex Operations W. v. Superior Court, 4 Cal.5th 903 (2018). The Court emphasized that statutory purpose “sets apart the Borello test for distinguishing employees from independent contractors from the [common law] standard…in which the ‘control of details’ factor is given considerable weight.” Id.
BORELLO TEST COMPARED TO THE DYNAMEX ABC TEST
Where the Borello Test and the Dynamex ABC Test are the Same:
The Borello test and the Dynamex ABC test both assume that the worker is an employee, and that the hiring entity must prove that the worker is an independent contractor.
Where the Borello Test and the Dynamex ABC Test Differ:
Under the Borello test, no single factor is dispositive of whether a worker is an employee or independent contractor. The Borello test employs a multi-factor balancing test, in which the facts and circumstances of each worker’s case is weighed against the Borello factors to determine whether such worker is an employee or an independent contractor. Courts will consider all potentially relevant facts, on a case-by-case basis, and will examine (1) the nature of the work; (2) the overall arrangement between the parties; and (3) the purpose of the law.
Wherein the Dynamex ABC test differs from the Borello test in that the ABC test is designed to make it easier for both hiring entities and workers to determine whether a worker is an independent contractor or an employee. Under the ABC test, rather than a multi-factor balancing test, the ABC test employes a more objective test, in which the inability of the hiring entitiy to demonstrate that the worker is not an independent contractor is dispositive of the conclusion that the worker is in, in fact, an employee.
- OCCUPATIONS WHERE THE BORELLO TEST APPLIES INSTEAD OF THE ABC TEST
Although the ABC test is applicable to a majority of California workers, some occupations and industries apply the Borello test.
Such Occupations Include:
- Certain occupations in connection with creating, marketing, promoting, or distributing sound recordings or musical compositions;
- Certain licensed insurance agents, brokers, and persons who provide underwriting inspections, premium audits, risk management, claims adjusting, third-party administration consistent with use of the term “third-party administrator,” as defined in subdivision (cc) of Section 10112.1 of Title 8 of the California Code of Regulations, or loss control work for the insurance and financial service industries;
- Certain licensed physicians, surgeons, dentists, podiatrists, psychologists, or veterinarians certain licensed attorneys, architects, landscape architects, engineers, private investigators and accountants;
- Certain registered securities broker-dealers or investment advisers or their agents and representatives;
- Certain direct salespersons;
- Certain manufactured housing salespersons;
- Certain licensed commercial fishers (only through December 31, 2025 unless extended by the Legislature);
- Certain newspaper distributors or carriers (only through December 31, 2024 unless extended by the Legislature);
- Certain persons engaged by an international exchange visitor program;
- Certain competition judges;
- Certain home inspectors, as defined in Section 7195 of the Business and Professions Code, and subject to the provisions of Chapter 9.3 (commencing with Section 7195) of Division 3 of that code.
For assistance, or more information regarding California worker classification, and how to avoid misclassification, contact the employment attorneys at San Diego Biz Law, APC.
The material in this article, provided by San Diego Biz Law, APC, is designed to provide informative and current information as of the date of the post. It should not be considered, nor is it intended to constitute, legal advice or promise similar outcomes.
THE BORELLO TEST
- WHAT IS THE BORELLO TEST?
In S.G. Borello & Sons, Inc. v. Dept. of Industrial Relations, the California Supreme Court established a series of factors, known as the Borello test, to determine whether a California worker is an employee or an independent contractor. 48 Cal.3d 341 (1989). The test relies on the following factors to determine whether an employer exerted the necessary control over the manner and means of accomplishing desired result [although such control need not be direct, actually exercised, or detailed]:
- Whether the worker performing services holds themselves out as being engaged in an occupation or business distinct from that of the employer;
- Whether the work is a regular or integral part of the employer’s business;
- Whether the employer or the worker supplies the instrumentalities, tools, and the place for the worker doing the work;
- Whether the worker has invested in the business, such as in the equipment or materials required by their task;
- Whether the service provided requires a special skill;
- The kind of occupation, and whether the work is usually done under the direction of the employer or by a specialist without supervision;
- The worker’s opportunity for profit or loss depending on their managerial skill;
- The length of time for which the services are to be performed;
- The degree of permanence of the working relationship;
- The method of payment, whether by time or by the job;
- Whether the worker hires their own employees;
- Whether the employer has a right to fire at will or whether a termination gives rise to an action for breach of contract; and
- Whether or not the worker and the potential employer believe they are creating an employer-employee relationship (this may be relevant, but the legal determination of employment status is not based on whether the parties believe they have an employer-employee relationship).
WEIGHING OF THE BORELLO FACTORS
The Borello test is referred to as a “multifactor” test because, in reaching the classification determination, a court will weigh all potentially relevant facts to the factors provided above – wherein no single factor is dispositive of the final determination. In fact, the courts have emphasized that different factors weigh more or less depending on the facts and circumstances of each given case.
For example, where the employer does not control the work details, an employee-employer relationship may be found if:
- The employer retains control over the operation as a whole;
- The worker’s duties are an integral part of the operation; and
- The nature of the work makes detailed control unnecessary.
Yellow Cab Cooperative, Inc. v. Workers’ Compensation Appeals Board, 226 Cal.App.3d 1288 (1991).
The California Supreme Court explained that Borello “emphasizes statutory purpose as the touchstone for. Deciding whether a particular category of workers should be considered employees rather than independent contractors for purposes of social welfare legislation.” Dynamex Operations W. v. Superior Court, 4 Cal.5th 903 (2018). The Court emphasized that statutory purpose “sets apart the Borello test for distinguishing employees from independent contractors from the [common law] standard…in which the ‘control of details’ factor is given considerable weight.” Id.
BORELLO TEST COMPARED TO THE DYNAMEX ABC TEST
Where the Borello Test and the Dynamex ABC Test are the Same:
The Borello test and the Dynamex ABC test both assume that the worker is an employee, and that the hiring entity must prove that the worker is an independent contractor.
Where the Borello Test and the Dynamex ABC Test Differ:
Under the Borello test, no single factor is dispositive of whether a worker is an employee or independent contractor. The Borello test employs a multi-factor balancing test, in which the facts and circumstances of each worker’s case is weighed against the Borello factors to determine whether such worker is an employee or an independent contractor. Courts will consider all potentially relevant facts, on a case-by-case basis, and will examine (1) the nature of the work; (2) the overall arrangement between the parties; and (3) the purpose of the law.
Wherein the Dynamex ABC test differs from the Borello test in that the ABC test is designed to make it easier for both hiring entities and workers to determine whether a worker is an independent contractor or an employee. Under the ABC test, rather than a multi-factor balancing test, the ABC test employes a more objective test, in which the inability of the hiring entitiy to demonstrate that the worker is not an independent contractor is dispositive of the conclusion that the worker is in, in fact, an employee.
- OCCUPATIONS WHERE THE BORELLO TEST APPLIES INSTEAD OF THE ABC TEST
Although the ABC test is applicable to a majority of California workers, some occupations and industries apply the Borello test.
Such Occupations Include:
- Certain occupations in connection with creating, marketing, promoting, or distributing sound recordings or musical compositions;
- Certain licensed insurance agents, brokers, and persons who provide underwriting inspections, premium audits, risk management, claims adjusting, third-party administration consistent with use of the term “third-party administrator,” as defined in subdivision (cc) of Section 10112.1 of Title 8 of the California Code of Regulations, or loss control work for the insurance and financial service industries;
- Certain licensed physicians, surgeons, dentists, podiatrists, psychologists, or veterinarians certain licensed attorneys, architects, landscape architects, engineers, private investigators and accountants;
- Certain registered securities broker-dealers or investment advisers or their agents and representatives;
- Certain direct salespersons;
- Certain manufactured housing salespersons;
- Certain licensed commercial fishers (only through December 31, 2025 unless extended by the Legislature);
- Certain newspaper distributors or carriers (only through December 31, 2024 unless extended by the Legislature);
- Certain persons engaged by an international exchange visitor program;
- Certain competition judges;
- Certain home inspectors, as defined in Section 7195 of the Business and Professions Code, and subject to the provisions of Chapter 9.3 (commencing with Section 7195) of Division 3 of that code.
For assistance, or more information regarding California worker classification, and how to avoid misclassification, contact the employment attorneys at San Diego Biz Law, APC.
The material in this article, provided by San Diego Biz Law, APC, is designed to provide informative and current information as of the date of the post. It should not be considered, nor is it intended to constitute, legal advice or promise similar outcomes.