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There are three different tests commonly used to determine if a worker is an employee or independent contractor: The common law agency test. The economic realities test. The IRS 20-factor analysis.

The ABC test is used for most individuals, but for some jobs, industries, and contracting relationships, the Borello multifactor test applies. For more information on employment status, visit the Employment Status Portal.

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 ...

5. The proposed S2052 would implement the "ABC Test," which classifies workers as employees unless the (a) worker is free from the control of the hiring entity, (b) the work performed is outside the hiring entity's bailiwick, and (c) the worker is "customarily engaged" in the type of work he is hired to do.

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.

The difference between an employee and a subcontractor depends on your right to direct and control the worker. In determining the employment tax status of a worker, the IRS considers three categories of evidence: Behavioral control, ? Financial control, and ? Relationship of the parties.