Independent Contractor Analysis
1. ABC Test
2. ABC Test Exceptions
2. ABC Test Exceptions
A worker is considered an employee unless the hiring entity can show that
- A: the worker is free from control and direction;
- B. the worker performs work outside the usual course of the hiring entity's business; and
- C. the worker has own independently established business of same type as work performed
2. ABC Test Exceptions
2. ABC Test Exceptions
2. ABC Test Exceptions
There are over 100 exceptions to the ABC Test, each with detailed requirements. ABC Test Exception categories include:
- Licensed Professionals
- Business-to-Business
- Professional Services
- Single-Engagement Events
- Subcontract Construction Work (Trucking & Non-Trucking)
- Sound Recording or Musical Composition Occupations
- Musician or Musical Group for a Single Engagement Live Performance
- Individual Performance Artists
- and more
3. Statutory Employees
2. ABC Test Exceptions
3. Statutory Employees
Some workers are employees by law. These workers are employees for specific payroll taxes, even if the ABC Test or an ABC Test Exception is satisfied.
- Corporate Officers
- LLC Corporate Members
- Certain Construction Industry Workers
- Certain Life Insurance Sales Agents
- Certain Agent/Commission Drivers
- Certain Traveling/City Salespersons
- Certain Home Workers
- Certain Artists/Authors in movies, radio or television industry
- Certain Commissioned Authors
REQUIRED: Written Contract
Freelance Worker Protection Act
For professional services of $250 or more (over the last 120 days), you must enter into a written contract with the following terms:
- The name and mailing address of each party;
- An itemized list of all services to be provided, including the value of those services and the rate and method of compensation;
- The date on which compensation is due or the mechanism by which the date shall be determined; and
- The date the independent contractor must submit a list of completed services due for payment.
