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When deciding whether you can safely treat a worker as an independent contractor, there are two separate tests you should consider: The common law test; and The reasonable basis test. The common law test: IRS examiners use the 20-factor common law test to measure how much control you have over the worker.

Workers (W-2 employees) typically enjoy amenities like benefits packages, paid time off, and a fixed income. While independent contractors (1099 workers) typically have to fund their own health insurance and retirement expenses.

Under common law, Michigan courts will use the Economic Reality Test to determine independent contractor classification. The Economic Reality Test incorporates several of the following considerations, including without limitation: Whether the employer incurs any liability when terminating an at-will relationship.

The law further states that independent contractor status is evidenced if the worker: (1) has a substantial investment in the business other than personal services, (2) purports to be in business for himself or herself, (3) receives compensation by project rather than by time, (4) has control over the time and place ...

Under common law, Michigan courts will use the Economic Reality Test to determine independent contractor classification. The Economic Reality Test incorporates several of the following considerations, including without limitation: Whether the employer incurs any liability when terminating an at-will relationship.

House Bill 4390 would define an "independent contractor" as a worker who meets all three of the following criteria: The individual is free from the employer's control and direction in connection with the performance of the work. The individual performs work that is outside the usual course of the employer's business.