Call centers and customer support operations have increasingly used remote contractors, especially since the COVID-19 pandemic. However, AB5 creates significant compliance challenges for this model in California.
Why Call Center Contractors Are High Risk
ABC Test Analysis for Typical Support Worker
| Prong | Typical Facts | Result |
|---|---|---|
| A: Control | Required to follow scripts, use company systems, work set hours | FAILS |
| B: Usual Course | Customer support IS the company's business | FAILS |
| C: Independent Business | Often works only for one company, no other clients | Often FAILS |
Conclusion: Most call center/support contractor arrangements fail all three prongs.
Common Industry Practices Under Scrutiny
Work-at-Home Agents
Many companies have used "work-at-home agents" as contractors. Key risk factors:
- Company provides software/systems
- Company sets schedules or shift availability
- Company monitors calls for quality
- Workers must follow scripts/procedures
- Company handles customer relationships
Outsourced Support Centers
Contracting with a support company (rather than individual agents) may work better:
- Support company is separate business entity
- Support company employs the agents
- Support company has multiple clients
- B2B exemption may apply
Compliant Models
Option 1: Employee Model
Hire support workers as W-2 employees (full-time or part-time):
- Full compliance with wage/hour laws
- Provide benefits, workers' comp
- Can set schedules, monitor quality, require scripts
- Higher cost but lower legal risk
Option 2: B2B Outsourcing
Contract with legitimate call center businesses:
- Call center is separate legal entity
- Call center has its own employees
- Call center serves multiple clients
- Call center controls agent management
Option 3: Out-of-State Workers
Remote workers in other states may not be covered by AB5:
- Worker physically in non-California state
- Other states' laws apply
- Still need to comply with those states' rules
- Tax nexus considerations
Quality Monitoring Considerations
A common question: Can we still monitor call quality with employees?
Yes. Employee status doesn't prevent reasonable workplace monitoring. You can:
- Record calls (with proper disclosure)
- Monitor for quality assurance
- Require adherence to scripts/procedures
- Set performance metrics
- Provide training and feedback