The IRS’s Twenty-Factor Test for Determining

Independent Contractor Status

1. Instructions—A worker who is required by the other person’s instructions as to
when, where, and how work should be done is ordinarily an employee.
2. Training—Requiring a worker to attend training, work with an experienced
employee, or other such methods indicates that there is control over the means
of how the work is to be accomplished.
3. Integration—When the success or continuation of a business depends on the
performance of certain services, the worker performing those services is subject
to a certain amount of control by the owner of the business.
4. Rendering of personal services—If services must be rendered personally, the results
of the work are controlled by the employer.
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5. Hiring, Supervising, and Paying Assistants—If the employer hires, supervises, and
pays assistants, control is exercised.
6. Continuing Relationships—A relationship that is on a continual basis between the
employer and works indicates an employer-employee relationship.
7. Set Hours of Work—The establishment of the setting of hours of work by the
employer indicates control.
8. Full Time Required—When a worker must devote substantially full-time hours
to an employer, the employer has control over the worker’s time. Independent
contractors are free to work when and for whom they choose.
9. Doing Work on Employer’s Premises—Work that is done on the employer’s premises
suggests that the employer has control over the worker.
10. Order of Sequence Set—Workers who are not free to perform work using their
own pattern but rather follow established routines and schedules of the
employer are said to be under the control of the employer.
11. Oral or Written Reports—Requiring the worker to submit regular oral or written
reports indicates control over the worker.
12. Payment by Hour, Week, Month—Independent contractors are usually paid
straight commission or by the job. Paying a worker by the hour, week, or
month indicates an employer-employee relationship provided this is not just
an agreed-on method of convenient payment.
13. Payment of Business and/or Traveling Expenses—While employers can reimburse
independent contractors for these types of expenses, the usual payment of
these expenses is typical of an employer-employee relationship.
14. Furnishing of Tools and Materials—Providing tools and materials to the worker
indicates an employer-employee relationship.
22 The Encyclopedia of Human Resource Management: Volume Two
15. Signifi cant Investment—If the worker performing the services invests in facilities
and these are not usually maintained by employees, this indicates an independent
contractor relationship.
16. Realization of Profi t or Loss—A worker who can realize a profi t or suffer a loss
as a result of his or her own work is generally an independent contractor.
17. Working for More Than One Firm at a Time—A worker performing more than
de minimis services for a number of unrelated firms or persons simultaneously
indicates that the work is that of an independent contractor.
18. Making Service Available to the General Public—A worker making his or her services
available to the general public on a regular basis indicates the relationship is
that of an independent contractor.
19. Right to Discharge—The right to discharge a worker by an employer indicates
the relationship of an employee-employer.
20. Right to Terminate—If the worker has the right to end the relationship with the
principal at any time without incurring a liability, this indicates an employeremployee
relationship.