My client's contract says I'm an independent contractor in California — could I actually be an employee under AB5?
The short answer
California's Department of Industrial Relations FAQ on independent contractors describes the ABC test established by AB 5 (codified at Labor Code §§ 2775 et seq.) to determine whether a worker is an employee or an independent contractor. The official FAQ states that a hiring entity cannot change a person's status by requiring them to sign an agreement stating they are an independent contractor — status is determined by the test, not by the label. How the ABC test applies to any specific situation depends on the facts; the official FAQ describes the test and provides examples. The contract label is one factor people ask about, but the official FAQ describes why it is not the deciding one. This page focuses on what to look for in the contract itself — not on advising any classification outcome. Scan your agreement and consider consulting a professional if you have questions about how classification applies to your situation.
Jurisdiction focus: CA — rules differ in other states.
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What California's DIR FAQ describes about the ABC test and contract labels
California's Department of Industrial Relations FAQ on independent contractors describes the ABC test, which starts with the assumption that all workers are employees and requires the hiring entity to establish all three parts to prove contractor status: (A) the worker is free from control and direction in performing the work, (B) the work is outside the usual course of the hiring entity's business, and (C) the worker is customarily engaged in an independently established trade or business of the same nature. The official FAQ states explicitly that the hiring entity cannot unilaterally establish contractor status by assigning the label or requiring the worker to sign an agreement stating they are an independent contractor.
The FAQ also describes several occupation-specific exceptions and the separate Borello multifactor test that applies in some situations. How any of these tests apply to a specific situation depends on the facts — the official FAQ describes the framework; how it applies is a question for each engagement.
Why people worry
Freelancers in California sometimes receive contractor agreements for work that is integrated into the client's core business, with detailed direction about how and when the work is done. The official FAQ makes clear that the contract label alone doesn't resolve the classification question — and that classification has real consequences for wage protections, benefits, and tax treatment. This is a question worth understanding before signing, especially for long-term or high-control engagements.
What to look for in your agreement
- The independent-contractor designation — and whether the actual working conditions described in the contract match what the DIR FAQ describes for contractor status.
- Control-and-direction language — does the contract specify how and when you work in ways that resemble employment?
- Whether the services are in the usual course of the client's business — the official FAQ gives examples of both.
- Whether exclusivity clauses or other restrictions limit your ability to maintain an independent business.
- The Borello-exception list — the official FAQ describes which occupations may use a different test.
Questions to ask before signing
- Ask the client to clarify the level of control they expect over how and when you work.
- Ask the other party to confirm whether similar work is performed by their employees or exclusively by contractors.
- Confirm whether any exclusivity clause would prevent you from maintaining other client relationships.
- Consider having the agreement reviewed before signing if the engagement involves significant control, long duration, or work that appears to be in the client's core business.
Why scan instead of guess
The general rule tells you the baseline. Your agreement tells you what you’re actually being asked to sign — and the wording is what binds. Dang reads the document and flags the clauses worth reviewing, in plain English.
The deterministic engine scores and decides what’s risky. The AI only enriches the plain-English wording — AI extracts, code decides, never the other way around.
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Common questions
Does signing an independent contractor agreement mean I'm definitely a contractor in California?
The California DIR FAQ states that status is determined by the ABC test, not by the label or by requiring a worker to sign an agreement stating they are an independent contractor. How the test applies to a specific situation depends on the facts.
What is the ABC test?
California's DIR FAQ describes it as a three-part test: the worker must be free from control and direction in performing the work, the work must be outside the hiring entity's usual course of business, and the worker must be customarily engaged in an independently established trade or business. All three parts must be satisfied for the hiring entity to establish contractor status.
Sources
- California Department of Industrial Relations — Independent Contractor FAQ (ABC test, AB 5, Labor Code §§ 2775 et seq.) (official agency FAQ) · official source
- Sources last checked 2026-06-11. Laws and market practices change — confirm current rules before relying on them.
No account required · File deleted after analysis · Not legal advice. Dang reports contract findings in plain English — general information, not legal advice about your situation. For consequential decisions, consult a licensed attorney in your state.