Contractor agreements that survive the ABC test.
California's AB 5 made independent-contractor classification harder than most jurisdictions. The agreement is one piece of the analysis — necessary but not sufficient. Drafted to fit the operational reality.
Drafting from $1,495 (S3) — flat-fee + costs
Why California contractor classification is harder
California's AB 5 codified the ABC test as the default classification framework for most California workers. To classify as an independent contractor under the ABC test, a worker must satisfy all three prongs:
(A) Free from control and direction in connection with the work performance, both as a matter of contract and in fact.
(B) Performing work outside the usual course of the hiring entity's business.
(C) Customarily engaged in an independently established trade, occupation, or business of the same nature as the work performed.
Failing any one prong defaults the worker to employee status. The B prong (work outside the usual course of business) is where most California small businesses get tripped up — a marketing agency hiring a marketing freelancer rarely satisfies B.
AB 5 exemptions
AB 5 has specific exemptions for certain professions and business arrangements — including the "business-to-business" exemption (under specific conditions), the "professional services" exemption (lawyers, doctors, certain creative professionals), and over 100 other carveouts. Whether your specific situation qualifies for an exemption is fact-specific.
The Borello test (a 13-factor common-law test) applies for exempted relationships. Borello is more permissive than the ABC test but still requires real independence.
What a properly drafted contractor agreement covers
Scope and deliverables
Specific, project-defined scope. "Provide marketing services as directed" reads like employment; "Deliver the marketing-campaign assets specified in the attached SOW by [date]" reads like contracting.
Independence indicators
Right of contractor to work for other clients; right of contractor to set own hours, methods, and tools; absence of company-provided equipment, training, or supervision; payment by project rather than time; absence of integration into company workflows.
Tax and benefits acknowledgment
Contractor responsible for own taxes, no W-2 benefits, no workers' comp coverage, contractor maintains own insurance.
IP assignment with §2870 acknowledgment
If the engagement involves contractor-developed IP that the company is paying for, the IP-assignment language has to acknowledge California Labor Code §2870. Skipping this can void the entire assignment.
Termination and conversion clauses
Defined termination triggers, notice periods. Be careful with conversion-to-employment provisions — they can support an argument that the relationship was always employment-track.
Confidentiality
Standard NDA-equivalent terms. Often the relationship is the only confidentiality coverage; the contractor's ongoing other-client work makes carve-outs important.
The agreement is necessary, not sufficient
A bulletproof contractor agreement won't save a misclassified relationship. The contract documents the parties' intent; the actual operational facts decide the classification. If a contractor is integrated into your operations, working at your direction, using your equipment, working on your core business, and paid hourly — the contract calling them a contractor doesn't change that.
What the agreement does: provides documentation supporting the classification, creates a clear record of the parties' understanding, and addresses the specific California-law issues (§2870, AB 5 exemption claims, tax responsibility) cleanly. The classification analysis itself is operational.
Other work in employment.
The questions buyers actually ask.
Tell us what you're working on.
Transactional matters start with a short discovery call. We figure out whether the work is one we can take and what it costs — before any retainer.