California Employee Classification And AB5 Defense Attorneys

Last updated on March 27, 2026

California’s AB5 law imposes strict standards on how businesses classify workers, creating significant risk for employers across Orange County, Los Angeles and throughout the state. Misclassification claims can lead to costly litigation, regulatory audits and exposure to substantial penalties under state law.

Businesses both large and small employ workers to help perform a wide range of job duties. Some employees may work part-time while others work full-time. Some workers may be treated as independent contractors as opposed to employees. How a business chooses to classify a worker is very important, because the potential tax penalties that come with the misclassification of a worker can have a devastating financial impact.

At Burkhalter Kessler Clement & George LLP, our lawyers provide skilled legal defense for employers who are embroiled in employee classification disputes. If you are concerned that you have not properly classified your employees, are under investigation for alleged misclassification or have been accused of improper classification of your employees, it is important to get experienced legal representation on your side as soon as possible.

Both Federal And State Agencies Have The Power To Investigate Classification Matters

The California Employment Development Department and numerous other government agencies can investigate employee classification matters. How employees are classified is important to both state and federal agencies because employers may be exempt from paying taxes on Social Security, Medicare, income, unemployment insurance and other taxes for workers who are part-time or are independent contractors. If an employer is discovered to have wrongfully benefited from these tax breaks, the monetary penalties can add up quickly.

Employers may face audits or inquiries from:

• The Employment Development Department regarding payroll tax classification
• The Labor Commissioner related to wage and hour compliance
• Other state agencies reviewing worker status and compensation practices

Responding effectively at this stage is critical. Early legal intervention can shape how the matter develops and may reduce the risk of expanded litigation.

How Are Employee Classifications Determined?

Some of the factors used by government agencies to determine how an employee should be classified include:

• Whether an employer directs the worker when it comes to performing job duties
• Whether a worker has to go through training
• Whether the employer sets the hours that are worked
• Whether the job duties differ from those performed by full-time employees
• Whether the worker is on-site or performs the job at an independently established place

There is no single factor that an agency can point to in order to make its ultimate determination, and the above are just some of the factors that an agency is likely to look at. Our attorneys can review the classification of your workers and can mount effective arguments in your company’s defense when it comes to employee misclassification.

The ABC Test: Navigating California’s Strict Classification Standards

At the center of AB5 law in California is the ABC test, which determines whether a worker can be classified as an independent contractor. Employers must satisfy all three elements:

• Control: The worker must operate free from the hiring entity’s control in performing the work.
• Usual course of business: The work performed must fall outside the company’s core business activities.
• Independent trade: The worker must be engaged in an independently established trade or business.

Failure to meet any one of these factors can result in reclassification as an employee. This can trigger liability for unpaid wages, benefits and penalties.

Protecting Employers From PAGA And Class Action Exposure

A single misclassification claim can quickly expand into broader litigation under the Private Attorneys General Act. Employers facing these risks must consider:

• Claims for civil penalties across an entire workforce
• Overlapping wage and hour allegations tied to classification issues
• Increased scrutiny from the Labor Commissioner and Employment Development Department
• Potential class action claims filed alongside PAGA allegations

These cases require a coordinated defense strategy. Our firm works to limit exposure, challenge representative claims and address underlying compliance issues that may affect the scope of liability.

Proven Results In High-Stakes Employment Litigation

Our firm has a strong track record of defending complex employment matters across California. We have successfully represented clients in Orange County and in Los Angeles Superior Court, including proceedings at the Stanley Mosk and Spring Street courthouses.

Recent results include a Daily Journal Top Verdict in Saifudeen v. Ralphs, reflecting our ability to handle significant employment disputes at trial. This experience informs our approach to AB5 defense, where precision and preparation are essential to protecting our clients’ interests.

Contact Our Lawyers For Help With Employment Litigation Defense

We can help protect your important business interests if you have been accused of misclassification of workers. Contact us online or call 888-714-1738 to schedule a consultation. At Burkhalter Kessler Clement & George LLP, we provide employment litigation defense services to companies throughout California.