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Notably, the new law does not apply to agreements covering an employer's confidential and proprietary information, protection of trade secrets, or inventions assignment agreements. The law also does not address covenants for independent contractors.
Summarily, the ABC test is stricter than the Borello test and renders more workers independent contractors. The ABC test is not unique to California and is commonly used all over the country, including in Illinois, which codifies the ABC test for the purposes of unemployment benefits.
The new law also expressly codifies an extended application of the blue pencil doctrine, allowing an Illinois court to rewrite unenforceable provisions of non-compete agreements to make them reasonable and enforceable.
Because dentists and doctors are exempt from the ABC Test, they must meet the common law requirements to be classified as independent contractors in California. These requirements are similar in many other states across the country as well.
The general rule is that an individual is an independent contractor if the payer has the right to control or direct only the result of the work and not what will be done and how it will be done. If you are an independent contractor, then you are self-employed.
As an independent contractor, you may have more freedom to choose how you complete your work, but you are responsible for paying your own taxes, getting your own health insurance, and paying into unemployment and workers comp funds if you wish to access those benefits.
Freelancers and consultants are known as "independent contractors" in legal terms. An independent contractor (IC) is a person who contracts to perform services for others without having the legal status of an employee.
People such as doctors, dentists, veterinarians, lawyers, accountants, contractors, and subcontractors who are in an independent trade, business, or profession in which they offer their services to the general public are generally independent contractors.
Adequate Consideration for the Restrictive Covenant Agreement. Of particular note for employees is that in Illinois in order for a non-compete restrictive covenant agreement to be enforceable, among other things, there must be adequate consideration.
Follow us on LinkedIn to see future News. The Act is not retroactive, but, beginning on January 1, 2022, the Act: bans noncompete agreements for employees making $75,000 per year or less (the salary threshold will increase by $5,000 every five years until reaching $90,000); and.