Misclassification: 1099 Is Not the Test

Belief: if you issue a 1099 and call someone a contractor, you solved classification.

In California, the label does not decide it. The relationship does. And there are two different frameworks that can apply, depending on the context.

First, the ABC test. This is the default framework in many California employment contexts. The burden is on the hiring business to satisfy all three prongs. If you cannot, the worker is treated as an employee for those purposes.

Second, the Borello test. Borello is not the exempt/non‑exempt wage-hour concept. Here, “exempt” means exempt from the ABC framework, so the analysis shifts to Borello’s multi‑factor, totality‑of‑circumstances approach (with right-to-control as the central factor).

Here is how misclassification liability gets created in real workplaces. A business brings someone in as a “contractor,” but sets their schedule, assigns priorities, trains them like an internal hire, and routes their work through the same manager chain. Nothing “evolves over time.” The facts either supported contractor status from day one or they did not.

The operational solution is front-end and mechanical: identify which framework applies to the relationship, align the contract to that framework, and then align operations to the contract. If operations run like employment, the paperwork cannot carry the risk.

This post shares general information based on common patterns I see in California workplaces. It is not legal advice, does not create an attorney-client relationship, and outcomes depend on specific facts — no lawyer can guarantee a result. Past results do not guarantee or predict future outcomes. AI may have been used to create this post. All content reviewed by a CA attorney before publication. This post may be attorney advertising.

Michael Trust Law, APC, 703 Pier Avenue, Ste. B367, Hermosa Beach, CA 90254: michaeltrustlaw.com