ABC test
In accounting, ABC test means a state test presuming a worker is an employee unless the hiring entity proves all three: (A) free from its control, (B) work outside the usual course of its business, and (C) customarily engaged in an independent trade — California (AB 5), Massachusetts, and New Jersey for unemployment.
- Layer
- Lexicon
- Defined in
- Lexicon
- Nearby
- 4
Authority
This definition follows Cal. Lab. Code §2775.
Every citation in this system, with the text we read and the date we checked it, is in US GAAP and where these rules come from.
For founders
The same idea written for a founder: what it costs a startup that ignores it, and what to do in a real month.
- Contractor or employee? Classification for startupsContractor or employee depends on control, not the contract. The IRS test, state rules, 1099s, payroll registration and the cost of getting it wrong.
- W-2 year end for startups: boxes, deadlines, correctionsThe W-2 boxes founders get wrong (box 1 vs 3 vs 5, box 12 codes), the W-3, the SSA deadline, state copies, and how to fix a mistake with a W-2c.
What it is not called
Each of these is a real word for a different thing. Using it here is what makes a product read as though it was built by someone who has not done the work.
- IRS test
- common-law test
Nearby in the catalog
No component names this concept outright. These are the ones in its part of the system, which is a weaker claim — but a component nothing links to is a component nobody finds.
Also in Tax
Defined in Lexicon. This page is generated from that document, so the two cannot disagree.