Does the ABC test apply to work done before 2018?

Dynamex (2018) replaced a multi-factor balancing test with the three-part ABC test for wage-order purposes, and the immediate question was whether businesses that had classified workers under the older standard were safe for the years before it.

Vazquez answered no. The court held the ABC test applies retroactively to cases that were pending when Dynamex became final, relying principally on the fact that Dynamex addressed an issue of first impression and did not overturn a settled rule on which parties had reasonably relied.

The practical effect is that a classification decision made in good faith years earlier can be tested against a standard announced afterwards. For a business with long-running contractor relationships, exposure is not limited to the period since the test changed.

The test itself is the part worth checking against every existing arrangement: the worker is an employee unless the hiring entity proves all three of (A) freedom from control and direction, (B) work outside the usual course of the hiring entity's business, and (C) an independently established trade or business of the same nature. B is where most arrangements fail, and it is not curable by contract language.