IRS 20 Factors "Group of Factors" test

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1. Level of instruction. If the company directs when, where, and how work is done, this control indicates an employer-employee relationship.  

2. Amount of training. Requesting or requiring workers to undergo company-provided training suggests an employment relationship since the company is directing the methods by which a worker performs their duties.  

3. Degree of business integration. Workers whose services are central to the business operations or significantly affect business outcomes are likely to be considered employees.  

4. Extent of personal services. Companies that insist or demand that a particular person performs the work have asserted a high degree of control, which indicates an employment relationship. In contrast, independent contractors are typically free to assign work to anyone.  

5. Control of assistants. If a company hires, supervises, and pays a worker’s assistants, this control suggests an employment relationship. If the worker gets to control the hiring, supervising, and paying of assistants, they could be defined as an independent contractor.  

6. Continuity of relationship. A continuous relationship between a company and a worker indicates an employment relationship. However, an independent contractor arrangement can also be an ongoing relationship that spans multiple, sequential projects.  

7. Flexibility of schedule. If a company gets to dictate a worker’s days and hours of work, this degree of control suggests an employer-employee relationship.  

8. Demands for full-time work. Workers who work full-time hours suggests a company has control over most of their time, which indicates an employment relationship.  

9. Need for on-site services. Requiring someone to work on company premises —  particularly if the work could be performed elsewhere — suggest an employer-employee relationship.  

10. Sequence of work. If a company requires work to be performed in specific order or sequence, this type of control suggests an employment relationship.  

11. Requirements for reports. If a worker has to regularly provide written or oral reports on project status, they could be viewed as an employee.  

12. Method of payment. If a worker is paid hourly, weekly, or monthly, this could suggest an employment relationship, unless the payments simply are a convenient way of distributing a lump-sum fee. It is more characteristic to pay freelancers upon project completion or commission. 

13. Repayment of business or travel expenses. Independent contractors are typically responsible for paying for travel or business expenses, and most contractors set their fees high enough to cover these costs. In contrast, reimbursement of travel and other business expenses by a company suggests an employment relationship.  

14. Provision of tools and materials. Workers who use company-provided equipment, tools, and materials to perform their work are more likely to be considered employees. Work largely done using independently obtained supplies or tools supports an independent contractor classification.  

15. Investment in facilities. While independent contractors and freelancers usually pay for their own work facilities, most employees rely on their employer to provide work facilities.  

16. Realization of profit or loss. If a worker’s earnings are predetermined and have little chance to realize significant profit or loss through their work, they are generally considered to be an employee.  

17. Work for multiple companies. Workers who provide services for multiple companies concurrently are likely to qualify as independent contractors.  

18. Availability to the public. If a worker regularly makes services available to the general public, they could qualify as an independent contractor.  

19. Control over discharge. If a company has the unilateral right to discharge a worker, this suggests an employment relationship. In contrast, a company’s ability to end an independent contractor relationship generally depends on the terms specified in the contract.  

20. Right of termination. Most employees can terminate their work for a company unilaterally without liability. Independent contractors cannot quit their work engagements without liability, except as permitted under their contracts. 

Behavior Control. Facts that show whether the business has a right to direct and control how the worker does the task for which the worker is hired include the type and degree of:

• Exercise of direction over time and place and sequence or means of work; 

• Whose instrumentalities (tools or equipment) are used; 

• Engagement of other workers; 

• Whether specific duties are assigned to a specific worker; 

• Instructions that the business gives to the worker; 

• Training that the business gives to the worker. 

Financial control. Facts that show whether the business has a right to control the business aspects of the worker’s job include:

• Who pays unreimbursed business expenses; 

• The extent of the worker’s investment in facilities or tools used; 

• The extent to which the worker makes the services available to the relevant market; 

• How the business pays the worker (salary or wage vs. fee-based); 

• The extent to which the worker realizes profit or loss. 

Type of relationship. Facts that show the parties’ type of relationship include:

• Existence and terms of a written contract; 

• Provision of benefits to worker; 

• Permanency of relationship; 

• Whether the services involved are a regular business activity of the employer.