What tests do agencies besides the IRS use to determine whether a worker is an employee or an independent contractor?
State workers’ compensation, unemployment compensation and tax agencies use various tests to determine worker status. Many use the same sort of test as the IRS (a “right of control” test), but emphasize different factors from the IRS’s. Others use an “economic reality” test that focuses on whether a worker is economically dependent upon a hiring company– this means that those who work for more than one company at a time are more likely to be classified as ICs. Many state unemployment compensation agencies use a special statutory test, also called the ABC test. This test focuses on just a few factors: • whether the hiring company controls the worker on the job • whether the worker is operating an independent business, and • where the work is performed — that is, whether the hiring company or the worker gets to decide where the work is done.
Related Questions
- What tests do agencies besides the IRS use to determine whether a worker is an employee or an independent contractor?
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