California supreme court rules employment test for gig workers is retroactive

The Supreme Court of California ruled that the ABC test that is adopted for determining workers’ employment classification status is retroactive. The decision could have implications for companies such as Uber and Lyft. The ABC test was codified in Assembly Bill 5 (AB5), which became law in 2020. The test provides that workers can only be hired as contractors if they control their work, if their duties fall outside the employer’s regular business, and if they have an independent business doing the contracted work. AB5 was one of the reasons for companies such as Uber and Lyft to heavily lobby to pass Proposition 22, which exempts them from having to hire their drivers as employees. Proposition 22 passed at the end of 2020.