The California Supreme Court narrowed the number of individuals who qualify as independent contractors, which could change the game for gig economy workers in the state. If workers are considered employees rather than independent contractors, their employer would pay for things like social security and workers’ compensation.

Dynamex, a delivery company, had traditionally classified drivers who allegedly performed similar pickup and delivery work as current drivers perform, as employees. Until 2004. In 2004 they created a new policy and new contracts and classified all drivers as independent contractors. A trial court certified a class action for Dynamex drivers who said they should be classified as drivers. The drivers claimed that by misclassifying them, Dynamex had violated the provisions of Industrial Welfare Commission wage order No. 9 and sections of the Labor Code.

In the case Dynamax vs The Superior Court of Los Angeles County, the court rejected “The Borello test”, a ten point test which was used as a standard test for employment. Instead, the court used the ABC test that is used to determined employment in Massachusetts and New Jersey. That test considers a worker an employee unless the employer can prove the worker is not under its supervision, that the worker does work outside of the employer’s business, and that the worker is engaged in independent work of the same nature. All three of these criteria must be met.

This case was deciding whether or not to classify workers as employees or independent contractors for the purposes of the state’s wage orders, and not directly workers’ compensation, though many are now speculating how the ruling might impact future workers’ compensation issues.

Many gig economy workers are currently considered independent contractors and not employees.

Read more from WorkCompWriter and check out the full case here.