What Is the Current Test When Deciding If Someone Is an Employee or Independent Contractor

When it comes to determining whether someone is an employee or an independent contractor, there are several factors to consider. In the past, the test was based on the degree of control the employer had over the worker. However, in recent years, the test has evolved to include several additional factors.

The current test for determining employee status is a multi-factor test that takes into account several factors, including the following:

1. Behavioral Control: This factor looks at the degree of control that the employer has over how the work is performed. An employee is generally subject to more control than an independent contractor.

2. Financial Control: This factor looks at the degree of control that the worker has over their own finances. An employee is generally paid a regular salary or wage, while an independent contractor is paid on a project-by-project basis.

3. Relationship: This factor looks at the overall relationship between the employer and the worker. An employee is typically seen as having a more long-term relationship with the employer, while an independent contractor is seen as having a more short-term relationship.

4. Customarily Engaged in an Independent Trade, Occupation, or Business: This factor looks at whether the worker is engaged in an independent trade, occupation, or business apart from the employer. If the worker has their own business, they are more likely to be considered an independent contractor.

5. Control Over Tools and Equipment: This factor looks at who provides the tools and equipment necessary to complete the work. If the employer provides the tools and equipment, the worker is more likely to be considered an employee.

6. Investment in Facilities: This factor looks at whether the worker has any investment in the facilities used to perform the work. If the worker has made a significant investment in their own facilities, they are more likely to be considered an independent contractor.

7. Opportunity for Profit or Loss: This factor looks at whether the worker has the opportunity to make a profit or suffer a loss based on their own skill and judgment. Independent contractors are more likely to have the opportunity to make a profit or suffer a loss based on their own work.

It`s important to note that no one factor is determinative in deciding whether someone is an employee or an independent contractor. Instead, the test looks at all of the factors as a whole to determine the overall relationship between the employer and the worker.

In conclusion, the current test for determining employee status is a multifactor test that takes into account several factors, including behavioral control, financial control, relationship, customarily engaged in an independent trade, occupation, or business, control over tools and equipment, investment in facilities, and opportunity for profit or loss. Employers should carefully consider each factor when determining whether to classify a worker as an employee or an independent contractor to ensure compliance with employment laws and regulations.