document.addEventListener("DOMContentLoaded", function(event) { jQuery('#global-getstarted').click(function(){ // tracking code here // GA Event Code: _trackEvent(Button, Click, global-getstarted); }); });
document.addEventListener("DOMContentLoaded", function(event) { jQuery('#global-getstarted').click(function(){ // tracking code here // GA Event Code: _trackEvent(Button, Click, global-getstarted); }); });

Q: What is/was the Borello test for independent contractors?

Share on twitter
Share on linkedin
Share on facebook
Share on email
Share on print

Learn how to classify independent contractors.

The Borello test is a requirement list outlining the qualifications of whether a worker could be classified as an independent contractor versus a full-time employee. It was the standard for classifying workers in the state of California before the ABC test

Under Borello, this primary test was known as the “right to control” test, determining whether the hiring entity controlled the manner and means of accomplishing the desired result by the person providing services. If it could be proven that the hiring entity had the “right to control,” the worker was deemed an employee by this standard.

The factors of the Borello test are as follows:

  1. Whether the person performing work is engaged in an occupation or business that is distinct from that of the company;
  2. Whether the work is part of the company’s regular business;
  3. Whether the company or the worker supplies the equipment, tools, and the place for the person doing the work;
  4. The worker’s financial investment in the equipment or materials required to perform the work;
  5. The skill required in the particular occupation;
  6. The kind of occupation, with reference to whether, in the locality, the work is usually done under the company’s direction or by a specialist without supervision;
  7. The worker’s opportunity for profit or loss depending on his or her own managerial skill (a potential for profit does not include bonuses);
  8. How long the services are to be performed;
  9. The degree of permanence of the working relationship;
  10. The payment method, whether by time or by the job; and
  11. Whether the parties believe they are creating an employer/employee relationship.

Download Liquid’s Freelancer Compliance Risk Checklist to assess your current risk level.

Download Checklist

How does the Borello Test differ from the ABC Test?

The main point of difference between the Borello and ABC tests is the Borello test must prove control of the process and work by the hiring entity whereas the ABC test provides a predictable set of standards under the presumption that workers are employees. Under the ABC test, the hiring entity’s right to control is not the most important factor in determining whether an independent contractor relationship is, but only one of three required factors.

Although the former Borello test had a greater number of requirements, the ABC test is actually more rigorous for hiring entities with all three prongs required to prove the independent contractor status of workers.

Download Liquid’s Employee (W2) versus Independent Contractor (1099) Compliance Checklist as a handy reference when evaluating your relationships with freelancers.

Download Checklist

Although the ABC test supersedes Borello in most cases, Borello is still in use (when California AB5 is inapplicable or when exemptions apply). So it’s important to understand the requirements of Borello.

It is up to the employer to prove that each independent contractor is classified properly. Liquid can help manage your independent contractor team, click here to learn how. Try Liquid today!

Disclaimer: The information provided does not, and is not intended to constitute legal or tax advice. It is for informational purposes only. Please consult an attorney and/or tax professional for advice on legal and tax matters.

Related Articles

Ready to scale up?

#GoLiquid and get more done today.