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On April 30, 2018, the California Supreme Court announced an important change in how employers will be required to distinguish between independent consultants and employees, making it harder for workers to fit the criteria to be called an “independent contractor.”1 The court adopted a test similar to the “ABC” test used in Massachusetts, which has been considered the strictest in the country, pulling more and more workers out of the “contractor” bucket and into the “employee” bucket—a change that may affect companies’ bottom lines.

Directors and officers of companies face the possibility that even if they diligently discharge their duties to their stockholders their stockholders may still sue them.