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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 ...

In 2019, the IRS found that this test was too complicated and difficult to apply consistently and revealed a new way of classifying workers in their Employer's Supplemental Tax Guide (2020). Essentially, the IRS compressed the 20-factor test into what we now know as the three-pronged test or the common law test.

Missouri uses a common-law standard, 20-factor test based on the IRS model to determine worker classification. The Missouri Department of Labor and Industrial Relations further breaks down the test into three main categories: behavioral control, financial control, and the type of relationship of the parties.

As explained above, the 20-Factor Test provides criteria for assessing how much control and independence a worker has in their relationship with a hiring company. The general goal is to understand whether a business has the right to direct and control a worker's actions.

An employee is paid by the hour, week or month. An independent contractor is usually paid by the job or on a straight commission. An employee's business and travel expenses are generally paid by an employer. This shows that the employee is subject to regulation and control.

The general rule is that an individual is an independent contractor if the payer has the right to control or direct only the result of the work and not what will be done and how it will be done. If you are an independent contractor, then you are self-employed.