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News | Jul 07, 2020

Watch the New National Employment Law Project (“NELP”) Video Describing the ABC Test.

As we have discussed over the years, several states have implemented an “ABC Test” for determining whether a worker is an “employee” rather than an “independent contractor.”  These ABC Tests make it easier for workers to demonstrate that they are “employees” entitled to many important workplace benefits and protections.  For example, employees generally are entitled to overtime pay when they work over 40 hours per week and are protected against many state laws limit the type of wage deductions that can be made to their pay.

The Illinois Wage Payment and Collection Law (“IWPCL”) contains a good example of an ABC Test.  As the Seventh Circuit Court of Appeals has observed:  “The IWPCA provides a broad definition of what constitutes an ‘employee’ using a three-prong test commonly referred to as an ABC test.”  Costello v. BeavEx, Inc., 810 F.3d 1045, 1050 (7th Cir. 2016).  Under this test, “all individuals are considered to be employees of an employer, unless the employer can prove all three prongs of the independent-contractor exemption.”  Id. at 1059.  The employer must prove that the worker is an individual:

  • who has been and will continue to be free from control and direction over the performance of his work, both under his contract … and in fact; and
  • who performs work which is either outside the usual course of business or is performed outside all of the places of business of the employer …; and
  • who is in an independently established trade, occupation, profession or business.

Id. (citing 820 ILCS 115/2).  Crucially, “because the test is conjunctive, if [S-L] cannot satisfy just one prong of the test, its [distributors] must be treated as employees.”  Costello, 810 F.3d at 1059 (emphasis supplied).

Anyway, the main point of this blog is to tell you that the NATIONAL EMPLOYMENT LAW PROJECT recently posted a great video that describes the ABC Test.  You can check out the video HERE.  -PW

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