Exemption Met: Borello Test Applies

Although the worker qualifies under an exemption and is thus, not subject to the A.B.C. test, the worker does need to pass an alternative test to be classified as an independent contractor, called the “Borello test.”

The Borello test is not a yes/no question based test and is instead a broad multifactor balancing test that is applied by taking into consideration all of the relevant facts of your specific situation. No one factor alone determines whether a worker is an independent contractor. It essentially comes down to the level of the worker’s independence and the facts of your situation. As a result, the factors in the Borello test can be ambiguous and difficult to apply.

Thus, it is strongly recommended that you to consult with an attorney in how to apply the Borello test to your specific situation to properly assess whether your worker is an independent contractor. For your reference, the Borello test factors are listed further below.

Schedule a 30 minute phone consultation for a discounted rate of $100 below to learn whether your worker is an independent contractor or an employee.

Borello Test Factors

The Borello test relies upon multiple factors to make a determination of whether a worker is an independent contractor or an employee, which are the following:

1. Whether the worker performing the services holds itself out as being engaged in an occupation or business distinct from that of the company’s (i.e. does the worker have an independent and separate business from the company?);

2. Whether the work is a regular or integral part of the company’s business (i.e. is the worker a necessary part of the company such that the worker leaving would cause a substantial issue for the company?);

3. Whether the company or the worker supplies the instrumentalities, tools, and the location for the worker performing the services;

4. Whether the worker has invested in the company, such as in the equipment or materials required to perform the services;

5. Whether the services provided require a special skill (i.e. is the worker considered to be a specialist in the field or certified for the services performed?);

6. The type of occupation and whether the services are usually done under the direction of a company or by a specialist without supervision (i.e. is the work something that the worker can do on the worker’s own?);

7. The worker’s opportunity for profit or loss depending on the worker’s managerial skill (i.e. does the worker have the ability to make a business decision that would affect the worker’s ability to profit from the work, such as with advertisement decisions?);

8. The length of time for which the services are to be performed;

9. The degree of permanence of the working relationship (e.g. one month vs. one year; the longer the amount of time and permanence in the relationship, the more likely that the worker will be considered an employee);

10. The method of payment, whether by time or by the job (e.g. one-time payment vs. monthly payments);

11. Whether the worker hires employees for the worker’s own business;

12. Whether the company has a right to fire at will or whether a termination gives rise to an action for breach of contract; and

13. Whether the worker and the company believe they are creating an employer-employee relationship (this may be relevant, but the legal determination of employment status is not based on whether the parties believe they have an employer-employee relationship or not).

Again, it is highly recommended to consult with an attorney in applying the Borello test to your situation as it is a complicated test to apply with no clear-cut answer. Schedule a 30 minute phone consultation for a discounted rate of $100 below to learn whether your worker is an independent contractor or an employee.