While an independent contractor has some definite advantages, the advantages could be offset by huge liabilities should the IRS, or state agencies, later determine that your worker was not, in fact, properly designated as an independent contractor. 

This Independent Contractor Test asks you the primary questions from to the "control test" used by the IRS. 

When in doubt about, it is safest to classify the worker as an employee. If you have questions, consult the IRS for their interpretation or an attorney or individual with expertise in independent contractor classification matters. 

DISCLAIMER: This is not a substitute for legal advice nor to provide legal guidance. It is the responsibility of employers to obey all applicable federal and state laws that affect them. 

Answer each of the following questions and then check the results to help you determine a worker’s classification.    (answers below)

 1. Do you provide instructions to the worker about when, where, and how he or she is to perform the work?   (    ) Yes    (    ) No

2. Do you provide training to the worker?    (    ) Yes    (    ) No

3. Are the services provided by the worker integrated into your business operations?    (    ) Yes    (    ) No

4. Must the services be rendered personally by the worker?    (    ) Yes    (    ) No

5. Do you hire, supervise, and pay assistants to the worker?    (    ) Yes    (    ) No

6. Is there a continuing relationship between you and the worker?   (    ) Yes    (    ) No

7. Do you set the work hours and schedule?   (    ) Yes    (    ) No

8. Does the worker devote substantially full time to your business?   (    ) Yes    (    ) No

9. Is the work performed on your premises?   (    ) Yes    (    ) No

0. Is the worker required to perform the services in an order or sequence set by you?   (    ) Yes    (    ) No

11. Is the worker required to submit oral or written reports to you?   (    ) Yes    (    ) No

12. Is the worker paid by the hour, week, or month?   (    ) Yes    (    ) No

13. Do you have the right to discharge the worker at will?   (    ) Yes    (    ) No

14. Can the worker terminate his or her relationship with you any time he or she wishes
        without incurring liability to you?   (    ) Yes    (    ) No

15. Do you pay the business or traveling expenses of the worker?   (    ) Yes    (    ) No

16. Does the worker furnish significant tools, materials and equipment?   (    ) Yes    (    ) No

17. Does the worker have a significant investment in facilities?   (    ) Yes    (    ) No

18. Can the worker realize a profit or loss as a result of his or her services?   (    ) Yes    (    ) No

19. Does the worker provide services for more than one firm at a time?   (    ) Yes    (    ) No

20. Does the worker make his or her services available to the general public?   (    ) Yes    (    ) No

1. Do you provide instructions to the worker about when, where, and how he or she is to perform the work? 

Compliance With Instructions
Workers who must comply with another person’s instructions about when, where, or how to work generally are considered employees. This applies even if the other person has the right to require compliance but does not exercise that right.

2. Do you provide training to the worker? 

Training
Requiring that a worker be trained through such methods as working with an experienced employee, attending instructional sessions or training courses, or corresponding with the employer, is indicative of employee status because it shows that the employer controls the way the work is done or the method that is used. Independent contractors, on the other hand, normally are not trained by the purchasers of their services.

3. Are the services provided by the worker integrated into your business operations? 

Integration Into the Business
The fact that a worker’s services are so integrated into an employer’s operations that the success or continuation of the business depends on the performance of the services generally indicates that the individual is subject to a certain amount of control by the owner of the business.

4. Must the services be rendered personally by the worker?

Personal Services Required 
Employee status is suggested if a worker is required to personally render the services in question, because such an arrangement indicates that the employer controls the methods used to accomplish the tasks. By contrast, a worker’s right to substitute another’s services without the employer’s knowledge suggests the existence of a contractor relationship.

5. Do you hire, supervise, and pay assistants to the worker?

Control Over the Hiring, Supervising, and Paying of Assistants
An employer that hires, supervises, and pays a worker’s assistants usually is viewed as controlling the work (and the individual performing the services) in question. On the other hand, workers who hire, supervise, and pay other workers in situations where they have agreed to provide the labor needed to attain a certain result generally are treated as independent contractors.

6. Is there a continuing relationship between you and the worker?

A Continuing Relationship
Employees usually are hired for a continuing, indefinite period. This generally applies even to work or services performed on an irregular but recurring basis, as well as to part-time, temporary, and seasonal work. The relationship between an independent contractor and employer, on the other hand, usually ends when the job is finished.

7. Do you set the work hours and schedule?

Set Hours of Work
A requirement that workers adhere to certain work hours established by the employer generally is viewed as a factor indicating employer control.

8. Does the worker devote substantially full time to your business?

A Full-time Work Requirement
Employee status is suggested if a worker must work on a substantially full-time basis for the employer since this indicates that the employer controls the amount of time the individual spends working and thus essentially restricts the worker’s ability to perform services for someone else. By contrast, independent contractors typically are free to work when and for whom they choose.

9. Is the work performed on your premises?

Working on the Employer’s Premises
Performance of work on the employer’s premises may be evidence of employer control, especially if the work could be done elsewhere. While performance at an off-premises site demonstrates some freedom from employer control, it does not by itself mean that the worker is an independent contractor. The importance of the work-on-premises factor depends on the nature of the service involved and the extent to which an employer generally world require that employees perform such services on the employer’s premises. Employer control is suggested when the employer has the right to compel the worker to travel a designated route, to canvass a territory within a certain time, or to work at specific places.

10. Is the worker required to perform the services in an order or sequence set by you?

A Required Work Order or Sequence
A requirement that a worker perform work in a certain order or sequence may indicate that the employer controls or retains the right to control the worker.

11. Is the worker required to submit oral or written reports to you?

Required Reports
A degree of control is suggested where a worker is required to submit regular oral or written reports to the employer.

12. Is the worker paid by the hour, week, or month?

Payment by the Hour, Week, or Month
Employees generally are paid by the hour, day, or month, while independent contractors typically are paid by the job or on a lump-sum or straight commission basis.

13. Do you have the right to discharge the worker at will?

Employer’s Discharge Rights
If an employer has the right to discharge an individual, that worker is viewed as an employee. Independent contractors, on the other hand, cannot be fired as long as they perform services in accordance with their contract specifications.

14. Can the worker terminate his or her relationship with you any time he or she wishes without incurring liability to you?

Worker’s Termination Rights
Employees typically can end their employment relationship at any time without incurring any liability, whereas independent contractors might be liable for a breach of contract if they leave without completing their work.

15. Do you pay the business or traveling expenses of the worker?

Payment of Business or Travel Expenses
Employer payment of a worker’s business or work-related travel expenses generally indicates employee status.

16. Does the worker furnish significant tools, materials and equipment?

Furnishing of Tools and Materials
An employer-employee relationship is indicated where an employer supplies a worker with a significant amount of the tools, materials, or other equipment needed to perform services. Moreover, in some occupations and industries where it is customary for individuals to provide their own tools, these workers also may be treated as employees.

17. Does the worker have a significant investment in facilities?

Investment in Facilities
Individuals are likely to be treated as independent contractors if they have a significant investment in the facilities they use in the course of performing services (such as an office rented at fair market value from a third party). IRS stresses that “special scrutiny is required with respect to certain types of facilities, such as home offices.”

18. Can the worker realize a profit or loss as a result of his or her services?

Risks of Profit or Loss
Independent contractors typically can invest significant amounts of time or capital in their work without any guarantee of success (that is they realize a profit or sustain a loss based on their success in performing the work or service). When workers are insulated from loss or are restricted in the amount of profit they can gain, they usually are classified as employees.

19. Does the worker provide services for more than one firm at a time?

Working For More Than One Firm
Workers who perform services for a number of businesses or people at the same time usually are considered independent contractors. However, a worker who performs services for more than one person may be an employee of each of the persons, especially where such persons are part of the same service arrangement.

20. Does the worker make his or her services available to the general public?

Worker’s Availability to the General Public
Workers who make their services available to the public on a regular and consistent basis generally are treated as independent contractors.