Understanding Worker Classification Crash Course

This lecture will define the first 5 factors. These factors are:

• level of instruction,
• training,
• business integration,
• services performed personally, and
• control of assistants.

After I define each factor, I will discuss the case comparison and show you how two different companies structured their relationship with its workers as it relates to each factor. You will also see the courts decision about whether each factor weighed in favor of independent contractor, employee, or neutral and why.

This lecture recaps the important points and key take-a-ways from factors one through five.

The lecture goes over factors six through ten which are:

• Continuity of relationship,
• flexibility of schedule,
• demands for full-time services,
• need for on-site services, and
• order and sequence of work.

After I define each factor, I will discuss the case comparison and show you how two different companies structured their relationship with its workers as it relates to each factor. You will also see the courts decision about whether each factor weighed in favor of independent contractor, employee, or neutral and why.

This lecture recaps the important points and key take-a-ways from factors six through ten.

The lecture covers factors eleven through fifteen which are:

• requirements for reports,
• method of payment,
• payment of business/traveling expenses,
• provision of tools and materials, and
• significant investment.

After I define each factor, I will discuss the case comparison and show you how two different companies structured their relationship with its workers as it relates to each factor. You will also see the courts decision about whether each factor weighed in favor of independent contractor, employee, or neutral and why.

This lecture recaps the important points and key take-a-ways from factors eleven through fifteen.

The lecture discusses factors sixteen through twenty which are:

• realization of profit or loss,
• working for multiple companies,
• services to the general public,
• right to discharge, and
• right to terminate.

After I define each factor, I will discuss the case comparison and show you how two different companies structured their relationship with its workers as it relates to each factor. You will also see the courts decision about whether each factor weighed in favor of independent contractor, employee, or neutral and why.

This lecture recaps the important points and key take-a-ways from factors sixteen through twenty.

This section covers a summary of the case comparison and the result of each case. This lecture also discusses other important things to consider when determining the classification of a worker.

Resource: Common Law Factors with examples is a 1 page cheat sheet that contains the 20 factors with an example of an employee versus and independent contractor in each factor.

This course covers the 20 Factor Test and by now, you should have a solid understanding of the things that an agency may consider during a classification audit. As an added bonus, this lecture reviews the current IRS classification test (which uses most of the 20 factors). The materials includes and IRS Test Information Sheet that can be used as a reference.

*Please note that the self-assessment materials are included under What's Next for your Business.

As of July 15, 2015, the United States Department of Labor issued guidance on the test it used to determine if a worker is an independent contractor or employee under the Fair Labor Standards Act. This lecture goes into a basic and general background of the FLSA and introduces the Economic Realities Test.

This lecture takes a deeper look into each factor of the Economic Realities Test and provides examples directly from the Department of Labor to help you better understand each factor. The materials include a pdf of the powerpoint slides.

This lecture will discuss next steps for your business and provide you with self-assessment tools so you can evaluate your own business practices. For each of the 20 Factor Test, the IRS Test, and the Economic Realities Test, the materials include:

1. A self-assessment questionnaire to get you thinking critically about your business practices; and
2. A worksheet that organizes the results of your assessment so you can get a holistic view of where you may need to make adjustments.

Using these three tests in conjunction with one another and making the necessary adjustments should help reduce the risk that your contractors are later classified as employees.

Now that you have an understanding of the 20 factors and have been thinking about your own business situation, I will cover 5 simple steps you can take to conduct your self-assessment. These steps are:

1. Get Organized
2. Determine Audit Type
3. Complete Independent Contractor v. Employee Self-Assessment Form
4. Complete Independent Contractor Worksheet
5. Make Adjustments

This lecture analyzes the Missouri Supreme Court case of Gateway Taxi Management v. Department of Employment Security and the effects it has on worker classification issues.