A home care worker who was classified by the agency she worked for as an independent contractor will get another chance to argue that she should be classified as an employee, after a California appeals court revived her case.

The ruling broadens the reach of a new California Supreme Court worker classification test that has been criticized by business groups, which say it will increase labor costs and deprive businesses and job seekers of flexible work arrangements.

Gig economy companies that rely on a contract workforce, including Uber Technologies Inc., Lyft Inc., Instacart Inc., DoorDash Inc., Postmates Inc.,...