California Unemployment Insurance Code Section 606.5

(a) Whether an individual or entity is the employer of specific employees shall be determined under common law rules applicable in determining the employer-employee relationship, except as provided in subdivisions (b) and (c). (b) As used in this section, a temporary services employer and a leasing employer is an employing unit that contracts with clients or customers to supply workers to perform services for the client or customer and performs all of the following functions: (1) Negotiates with clients or customers for such matters as time, place, type of work, working conditions, quality, and price of the services. (2) Determines assignments or reassignments of workers, even though workers retain the right to refuse specific assignments. (3) Retains the authority to assign or reassign a worker to other clients or customers when a worker is determined unacceptable by a specific client or customer. (4) Assigns or reassigns the worker to perform services for a client or customer. (5) Sets the rate of pay of the worker, whether or not through negotiation. (6) Pays the worker from its own account or accounts. (7) Retains the right to hire and terminate workers. (c) If an individual or entity contracts to supply an employee to perform services for a customer or client, and is a leasing employer or a temporary services employer, the individual or entity is the employer of the employee who performs the services. If an individual or entity contracts to supply an employee to perform services for a client or customer and is not a leasing employer or a temporary services employer, the client or customer is the employer of the employee who performs the services. An individual or entity that contracts to supply an employee to perform services for a customer or client and pays wages to the employee for the services, but is not a leasing employer or a temporary services employer, pays the wages as the agent of the employer. (d) In circumstances which are in essence the loan of an employee from one employer to another employer wherein direction and control of the manner and means of performing the services changes to the employer to whom the employee is loaned, the loaning employer shall continue to be the employer of the employee if the loaning employer continues to pay remuneration to the employee, whether or not reimbursed by the other employer. If the employer to whom the employee is loaned pays remuneration to the employee for the services performed, that employer shall be considered the employer for the purposes of any remuneration paid to the employee by the employer, regardless of whether the loaning employer also pays remuneration to the employee.