What Legal Tests are Used to Determine Whether Workers are ICs or Employees?
There is no single, clear-cut test for classification. Different legal tests for determining worker status are used by various government agencies, including: • the Internal Revenue Service • state unemployment compensation insurance agencies • state workers’ compensation insurance agencies • state tax departments • the United States Labor Department • the National Labor Relations Board. Each of these agencies is concerned with worker classification for different reasons, and has different biases and practices. Each agency normally makes classification decisions on its own and need not consider what other agencies have done, though they are often strongly influenced by it. As a result, it’s possible for one agency to find that a worker is an IC and another that he or she is an employee. It’s also possible, though rare, for a worker to be deemed an IC in one state and an employee in another.
