Navigating California Worker Classification Rules - 0.2 CPE

California applies some of the strictest worker classification rules in the country. Businesses that improperly classify workers as independent contractors may face payroll tax assessments, wage claims, penalties, and significant compliance exposure.

Understanding the ABC test, exemption rules, and contractor reporting requirements is essential for reducing classification risk.

Learning Objective

Recognize the differences between employee and independent contractor classification standards under California law.

Course Description

This nano-learning course explains California’s worker classification standards, including the ABC test, Borrello test, and independent contractor reporting requirements.

Best Suited For

Tax and accounting professionals advising business owners, payroll departments, human resource professionals, startups, or clients utilizing independent contractors in California.

Why This Matters

California worker classification rules create substantial compliance risk for businesses using independent contractors. Misclassification can trigger payroll tax liabilities, wage claims, penalties, workers’ compensation exposure, and costly PAGA litigation. Understanding the ABC test, exemption categories, and DE 542 reporting requirements helps practitioners reduce audit and litigation risk.

Author / Instructor

Lee T. Reams, Sr., BSME EA
Lee T. Reams, Sr. is an Enrolled Agent with extensive experience in tax preparation, representation, and advanced tax planning. He is known for helping practitioners apply complex tax rules in real-world client situations.

Course Details

This course qualifies for NASBA continuing professional education credit. CountingWorks, Inc. is registered with the National Association of State Boards of Accountancy (NASBA) as a sponsor of continuing professional education on the National Registry of CPE Sponsors. State boards of accountancy have final authority on the acceptance of individual courses for CPE credit. Complaints regarding registered sponsors may be submitted to the National Registry of CPE Sponsors through its website: www.nasbaregistry.org.

Understand California’s Worker Classification Standards

Start Navigating California Worker Classification Rules and learn how the ABC test, exemption rules, and contractor reporting requirements affect compliance and payroll risk.