AB 5’s Impact on Musicians, Part 3 – The Borello Test
It was recently announced that an exemption to AB 5 is in the works for musicians that would, for the most part, effectively make musicians (and the persons hiring them) exempt from AB 5 and leave them to be instead governed by the prior Borello test. Which of course raises the question of what the Borello test actually is.
Thankfully, unlike AB 5, the Borello test has been time tested, extensively analyzed, and applied numerous times since it was first created in 1989 in the case of S.G. Borello & Sons, Inc. v. Department of Industrial Relations, 48 Cal.3d 341. The analysis is time-tested and well understood, providing musicians (and their attorneys and accountants) with the ability to make a determination as to whether an arrangement is one of an employee or one of independent contractor. There are countless articles that have addressed the Borello test, so we’ll just quote the synopsis from the EDD below:
“The test relies upon multiple factors to make that determination, including whether the potential employer has all necessary control over the manner and means of accomplishing the result desired, although such control need not be direct, actually exercised or detailed. This factor, which is not dispositive, must be considered along with other factors, which include:
- Whether the worker performing services holds themselves out as being engaged in an occupation or business distinct from that of the employer;
- Whether the work is a regular or integral part of the employer’s business;
- Whether the employer or the worker supplies the instrumentalities, tools, and the place for the worker doing the work;
- Whether the worker has invested in the business, such as in the equipment or materials required by their task;
- Whether the service provided requires a special skill;
- The kind of occupation, and whether the work is usually done under the direction of the employer or by a specialist without supervision;
- The worker’s opportunity for profit or loss depending on their managerial skill;
- The length of time for which the services are to be performed;
- The degree of permanence of the working relationship;
- The method of payment, whether by time or by the job;
- Whether the worker hires their own employees;
- Whether the employer has a right to fire at will or whether a termination gives rise to an action for breach of contract; and
- Whether or not the worker and the potential employer believe they are creating an employer-employee relationship (this may be relevant, but the legal determination of employment status is not based on whether the parties believe they have an employer-employee relationship).”
Borello is referred to as a “multifactor” test because it requires consideration of all potentially relevant facts – no single factor controls the determination. Courts have emphasized different factors in the multifactor test depending on the circumstances.”
So what does all this mean for musicians? First, in view of the current world circumstances, it is unlikely that the exemption for musicians will be quickly passed into law and, perhaps more importantly, it is uncertain whether the law will be retroactive – that is, whether it will provide amnesty to those who have been in violation of the law under AB 5 but are not in violation of the law under Borello. For those who are risk-averse, this means that AB 5 is still the standard for compliance.
And second, the application of the Borello test to most arrangements for musicians is likely to fall on the side of an independent contractor relationship. Without going into a lengthy analysis of each of the 13 factors listed above, the bottom line is that most arrangements for musicians do not look like a traditional employment arrangement – which is essentially what the Borello test looks for. Of course, individual circumstances may vary and the actual analysis will depend on those circumstances; however, assuming that the exemption does pass and is as described, there is a significant ray of hope on the horizon for musicians – something we are all very much in need of during this challenging time!
From all of us at BKN, we hope that you remain safe and well.
Last Updated April 30, 2020