Correctly classifying your worker as an employee or an independent contractor is an essential task to avoid civil liabilities, penalties, and fines associated with misclassification. This article will cover the 20 factors often used by state agencies in determining independent contractor status, which can be used as a general self-evaluation tool for your current workforce. For a state-specific determination on your workforce’s classification, contact us for a legal consultation.

Twenty factors to Consider: Independent Contractor vs Employee

Every state has its own set of guidelines and case laws when determining if a worker is an independent contractor or an employee. Most state agencies frequently consider the 20-factor test when making independent contractor determinations. The 20 factors are the following: (1) instructions, (2) training, (3) integration with the company’s operations, (4) services rendered personally, (5) hiring, supervising, and paying helpers, (6) continuing relationship, (7) set hours of work, (8) full time or exclusive work, (9) location where services are performed, (10) specifying the order or sequence of work, (11) oral or written reports, (12) payments, (13) business or travel expenses, (14) tools and materials, (15) investment, (16) profit and loss, (17) number of companies with whom the independent contractor works, (18) advertising services to the general public, (19) right to fire, and (20) right to quit

The above 20 factors are useful in doing an internal evaluation of compliance under employment laws. If you are an employer who needs guidance or has questions on determining whether your worker is an independent contractor or employee, contact us for a complimentary consultation.