California High Court Says Worker Status Test Is Retroactive (2)

The California Supreme Court ruled that the state’s rigid “ABC test” for determining if workers are employees or independent contractors applies retroactively, making businesses potentially liable for lawsuits filed years before the standard existed.

The state high court created the three-part test in a 2018 ruling, Dynamex Operations West v. Superior Court. It was later codified and expanded with Assembly Bill 5, a law that sparked the Proposition 22 ballot initiative in which voters approved a carveout for app-based companies in the gig economy, such as Uber Technologies Inc. and Lyft Inc.

Business groups, including the U.S. Chamber ...