Independent Contractor Tests by State: When Your 1099 Helper Is Legally an Employee

Alabama Common-Law Control Test

Statute / agency: Ala. Code § 25-4-10 (UI); common law

Wage-and-hour test: Common law for wage claims (Alabama has no state wage-and-hour act; the FLSA economic-reality test governs minimum wage and overtime). Common-law right-to-control test (the IRS 20-factor analysis or the state’s version of it): who controls how, when and where the work is done, who supplies tools and the truck, how the worker is paid, whether he can work for others and whether the relationship is ongoing.

Unemployment and workers’ comp: UI uses a common-law control test by statute; workers’ comp uses right-to-control with emphasis on the method of payment and who furnishes equipment.

Penalties: Back UI taxes and comp premiums with interest; FLSA back wages and liquidated damages; no state misclassification statute.

Trades note: Alabama is one of the most lenient states on paper, but the comp carrier’s audit still charges premium on uninsured 1099 labor. A “1099 helper” who rides in your van, uses your tools, works your schedule and has no other customers is an employee under every test on this page; the question only gets close for a licensed, insured sub with his own truck, his own customers and his own crew.

Alaska ABC for UI; Control for Wages

Statute / agency: Alaska Stat. § 23.20.525(a)(8) (UI ABC); § 23.30.230 (comp)

Wage-and-hour test: Common-law/economic-reality test for the Alaska Wage and Hour Act, weighing control, integration, investment and opportunity for profit.

Unemployment and workers’ comp: ABC test: the worker is an employee unless (A) free from control in fact and under contract, (B) performs work outside the usual course of the hiring business or away from its places of business, and (C) is customarily engaged in an independently established trade. Workers’ comp uses a statutory six-part test (§ 23.30.230(a)(12)) that requires, among other things, that the worker have a business license, maintain his own place of business, and be able to hire and fire his own helpers.

Penalties: UI and comp assessments with penalties; Alaska’s comp statute imposes stop-work orders and $1,000-a-day penalties on uninsured employers of misclassified workers.

Trades note: The comp six-part test is the one that bites: a sub without his own business license and the ability to hire helpers is an employee for comp regardless of the 1099. A “1099 helper” who rides in your van, uses your tools, works your schedule and has no other customers is an employee under every test on this page; the question only gets close for a licensed, insured sub with his own truck, his own customers and his own crew.

Arizona Control Test; Independent Business Declaration

Statute / agency: A.R.S. § 23-1601 to -1604 (Declaration of Independent Business Status); § 23-902 (comp)

Wage-and-hour test: Right-to-control test. A signed Declaration of Independent Business Status (§ 23-1601) creates a rebuttable presumption of contractor status if it recites the statutory elements (worker controls means and methods, is free to work for others, supplies his own tools, isn’t paid a salary, etc.) and the relationship actually matches.

Unemployment and workers’ comp: UI uses the right-to-control test with the Declaration as evidence; workers’ comp uses § 23-902(C)’s control test, and the Industrial Commission looks hard at who supplies equipment and sets hours.

Penalties: UI and comp assessments; comp claims against an uninsured employer come with a 10% penalty and personal liability. No stand-alone misclassification penalty.

Trades note: Get the Declaration signed, but it only helps if the facts match; a sub who works your schedule in your van is an employee no matter what he signed. See drug testing laws by state for the parallel safety-sensitive designations. A “1099 helper” who rides in your van, uses your tools, works your schedule and has no other customers is an employee under every test on this page; the question only gets close for a licensed, insured sub with his own truck, his own customers and his own crew.

Arkansas ABC for UI; 20-Factor Elsewhere

Statute / agency: Ark. Code § 11-10-210(e) (UI ABC); Act 1055 (2019) (IRS 20-factor for other purposes)

Wage-and-hour test: Act 1055 (2019) adopted the IRS 20-factor test for the Minimum Wage Act, workers’ comp and tax purposes.

Unemployment and workers’ comp: ABC test: the worker is an employee unless (A) free from control in fact and under contract, (B) performs work outside the usual course of the hiring business or away from its places of business, and (C) is customarily engaged in an independently established trade. (UI only). Workers’ comp follows the 20-factor test under Act 1055.

Penalties: UI and comp assessments; the Workers’ Compensation Commission can assess up to $10,000 per violation for failure to secure coverage on misclassified workers.

Trades note: Arkansas is one of the few states that codified the 20-factor test; the UI ABC test is the stricter one and the one the auditor uses. A “1099 helper” who rides in your van, uses your tools, works your schedule and has no other customers is an employee under every test on this page; the question only gets close for a licensed, insured sub with his own truck, his own customers and his own crew.

California ABC Test (AB 5) With Construction Sub Exemption

Statute / agency: Labor Code § 2775–2787 (AB 5, AB 2257); Dynamex (2018); Labor Code § 226.8

Wage-and-hour test: ABC test for the Labor Code, the Wage Orders and UI: the hiring entity must prove all three prongs, and prong B (work outside the usual course of the business) is nearly impossible for a plumbing company hiring a plumber. Exemptions revert to the Borello multi-factor test: the business-to-business exemption (§ 2776, 12 conditions including a written contract, the contractor’s own business license, its own location, and the freedom to work for others) and the construction subcontractor exemption (§ 2781: sub must hold a CSLB license, be a separate entity, have its own business location, carry its own insurance, and be free to hire its own employees and set its own rates).

Unemployment and workers’ comp: UI (EDD) applies the same ABC test; workers’ comp applies the ABC test for most workers and Borello for the exempt categories. An unlicensed worker doing work that requires a CSLB license is an employee by statute (Labor Code § 2750.5) regardless of any test.

Construction-specific rule: The § 2781 construction exemption is the lifeline for trades: a licensed, insured sub with his own entity and location is tested under Borello. An unlicensed sub is your employee, full stop.

Penalties: Willful misclassification carries civil penalties of $5,000–$15,000 per violation ($10,000–$25,000 for a pattern) under § 226.8, plus back wages, waiting-time penalties, PAGA exposure, EDD assessments and comp penalties. The Labor Commissioner, EDD and private plaintiffs all enforce.

Trades note: If the sub doesn’t hold his own CSLB license, stop. If he does, paper the § 2781 conditions. See California employment laws for trade employers. A “1099 helper” who rides in your van, uses your tools, works your schedule and has no other customers is an employee under every test on this page; the question only gets close for a licensed, insured sub with his own truck, his own customers and his own crew.

Colorado Statutory Control Test; Written-Contract Presumption

Statute / agency: C.R.S. § 8-70-115 (UI); § 8-40-202(2) (comp); § 8-72-114 (penalties)

Wage-and-hour test: Colorado’s wage laws use the UI definition: a worker is an employee unless free from control and direction and customarily engaged in an independent trade. A written contract reciting nine statutory factors (no training, no set hours, can work for others, paid by the job, own tools, etc.) creates a rebuttable presumption of contractor status if signed and the facts match.

Unemployment and workers’ comp: UI and workers’ comp use the same two-part test and the same nine-factor written-contract presumption.

Penalties: Misclassification with willful disregard: up to $5,000 per misclassified employee for a first offense and $25,000 for subsequent ones, plus back premiums; the Division of Unemployment Insurance publishes violators.

Trades note: Use the statutory nine-factor contract; it’s the only written presumption of its kind that an auditor will respect. A “1099 helper” who rides in your van, uses your tools, works your schedule and has no other customers is an employee under every test on this page; the question only gets close for a licensed, insured sub with his own truck, his own customers and his own crew.

Connecticut ABC for UI; Control for Wages

Statute / agency: Conn. Gen. Stat. § 31-222(a)(1)(B)(ii) (UI ABC); § 31-275(9) (comp); § 31-69a (penalties)

Wage-and-hour test: Right-to-control test for wage-and-hour claims, focusing on the hiring party’s right to control the means and methods of the work.

Unemployment and workers’ comp: ABC test: the worker is an employee unless (A) free from control in fact and under contract, (B) performs work outside the usual course of the hiring business or away from its places of business, and (C) is customarily engaged in an independently established trade. (UI). Workers’ comp uses a right-to-control test with the ABC prongs as evidence. The Department of Labor’s Joint Enforcement Commission on Employee Misclassification coordinates UI, comp and wage enforcement.

Penalties: Stop-work orders and $300-a-day penalties for construction employers who misclassify to avoid comp (§ 31-288); UI assessments; wage penalties.

Trades note: Connecticut’s stop-work order statute targets construction sites specifically; a 1099 crew on a job site invites an inspection. A “1099 helper” who rides in your van, uses your tools, works your schedule and has no other customers is an employee under every test on this page; the question only gets close for a licensed, insured sub with his own truck, his own customers and his own crew.

Delaware Workplace Fraud Act (Construction ABC)

Statute / agency: 19 Del. C. ch. 35 (Workplace Fraud Act); § 3302(10)(K) (UI ABC)

Wage-and-hour test: Common-law test for general wage claims, but the Workplace Fraud Act applies an ABC test to the construction services industry (which includes HVAC, plumbing, electrical and most building trades): the worker is presumed an employee unless the employer proves all three prongs or the worker qualifies as an exempt person (a sole proprietor or LLC with his own business, insurance and the freedom to work for others).

Unemployment and workers’ comp: ABC test: the worker is an employee unless (A) free from control in fact and under contract, (B) performs work outside the usual course of the hiring business or away from its places of business, and (C) is customarily engaged in an independently established trade. (UI). Workers’ comp follows the Workplace Fraud Act in construction and the control test elsewhere.

Construction-specific rule: The Workplace Fraud Act requires construction employers to give every worker a written notice of his classification and keep records for three years.

Penalties: $1,000–$5,000 per misclassified worker (up to $20,000 for knowing violations), stop-work orders, debarment from public contracts for up to three years, and a private right of action with treble damages.

Trades note: Delaware’s law is written for exactly this industry; the classification notice and the exempt-person test are the paperwork. A “1099 helper” who rides in your van, uses your tools, works your schedule and has no other customers is an employee under every test on this page; the question only gets close for a licensed, insured sub with his own truck, his own customers and his own crew.

District of Columbia Workplace Fraud Act (Construction ABC)

Statute / agency: D.C. Code § 32-1331.01 et seq. (Workplace Fraud Amendment Act); § 51-101 (UI)

Wage-and-hour test: Common-law test for general wage claims; the Workplace Fraud Act applies an ABC test with a presumption of employment to the construction services industry, requires written classification notices, and makes it unlawful to require a worker to form an LLC or sign a franchise agreement to avoid employee status.

Unemployment and workers’ comp: UI uses a common-law control test; workers’ comp follows the Workplace Fraud Act in construction.

Construction-specific rule: Construction employers must post the DOES notice and give written notice to each worker of his status and the law’s protections.

Penalties: $1,000–$5,000 per misclassified worker, stop-work orders, debarment, and a private right of action with attorney fees.

Trades note: Same model as Maryland and Delaware; a sub needs his own entity, insurance and customers to survive prong C. A “1099 helper” who rides in your van, uses your tools, works your schedule and has no other customers is an employee under every test on this page; the question only gets close for a licensed, insured sub with his own truck, his own customers and his own crew.

Florida Control Test; Statutory Comp Definition

Statute / agency: Fla. Stat. § 440.02(15)(d) (comp); § 443.1216 (UI); § 440.105 (fraud)

Wage-and-hour test: Right-to-control test for wage claims (Florida has no general wage-and-hour agency; the FLSA economic-reality test governs).

Unemployment and workers’ comp: UI uses a common-law control test. Workers’ comp has a statutory definition: a worker is an independent contractor only if at least four of six listed criteria are met (own business name and FEIN, paid by invoice, has his own insurance, works for others, controls his hours, etc.) or he meets the alternative control factors. In the construction industry, a “contractor” who hires a sub is liable for the sub’s uninsured workers, and an independent contractor working in construction is an employee for comp purposes unless he carries his own policy or exemption.

Construction-specific rule: In construction, every sub must carry comp or an exemption; misclassifying to avoid comp is a felony under § 440.105(4)(b)(9).

Penalties: Stop-work orders, a penalty of twice the premium evaded for the prior two years ($1,000 minimum), and third-degree felony charges for knowingly misclassifying construction workers to avoid comp. The Division runs job-site sweeps.

Trades note: Florida’s comp enforcement is the strictest in the South; see workers’ comp owner exemptions by state for the exemption rules the sub needs. A “1099 helper” who rides in your van, uses your tools, works your schedule and has no other customers is an employee under every test on this page; the question only gets close for a licensed, insured sub with his own truck, his own customers and his own crew.

Georgia ABC for UI (Amended); Control for Wages

Statute / agency: O.C.G.A. § 34-8-35(f) (UI ABC, as amended 2022); common law

Wage-and-hour test: Right-to-control test for wage claims.

Unemployment and workers’ comp: UI uses an ABC-style test as amended by HB 389 (2022): the worker is an employee unless he is free from control, customarily engaged in an independent business, and meets seven listed indicators (can work for others, is not required to work set hours, is paid by the job, etc.), with a safe harbor for certain app-based and ride-share work. Workers’ comp uses the common-law control test with a statutory presumption that a contractor’s uninsured sub’s employees are the contractor’s (§ 34-9-8).

Penalties: UI assessments with interest; HB 389 added civil penalties for misclassification starting at $2,500 per worker for repeat offenders.

Trades note: Georgia’s 2022 amendment tightened the UI test for most industries while carving out gig platforms; trades got no carve-out. A “1099 helper” who rides in your van, uses your tools, works your schedule and has no other customers is an employee under every test on this page; the question only gets close for a licensed, insured sub with his own truck, his own customers and his own crew.

Hawaii ABC for UI and Comp

Statute / agency: HRS § 383-6 (UI ABC); § 386-1 (comp); § 387-1 (wages)

Wage-and-hour test: The Wage and Hour Law uses a right-to-control test, but Hawaii’s Department of Labor applies the ABC factors in practice.

Unemployment and workers’ comp: ABC test: the worker is an employee unless (A) free from control in fact and under contract, (B) performs work outside the usual course of the hiring business or away from its places of business, and (C) is customarily engaged in an independently established trade. (UI). Workers’ comp applies a control test with a presumption of coverage (§ 386-85) and the ABC factors as evidence.

Penalties: UI and comp assessments; $100 per employee per day for failure to carry comp; wage penalties.

Trades note: Hawaii’s comp presumption is the practical rule: the Department presumes the worker is covered and you prove otherwise. A “1099 helper” who rides in your van, uses your tools, works your schedule and has no other customers is an employee under every test on this page; the question only gets close for a licensed, insured sub with his own truck, his own customers and his own crew.

Idaho Two-Part Statutory Test

Statute / agency: Idaho Code § 72-1316(4) (UI); § 72-102(13) (comp); § 44-1501 (wages)

Wage-and-hour test: Right-to-control test for wage claims.

Unemployment and workers’ comp: UI and workers’ comp use a two-part test: the worker must be (1) free from the right of control over how the work is done and (2) engaged in an independently established trade or business. Both must be shown; the second requires evidence of other customers, advertising, a business license and capital investment.

Penalties: UI and comp assessments; comp penalties of $2 a day per employee and personal liability for the claim.

Trades note: Idaho’s second prong is where the one-truck sub fails: no other customers, no business. A “1099 helper” who rides in your van, uses your tools, works your schedule and has no other customers is an employee under every test on this page; the question only gets close for a licensed, insured sub with his own truck, his own customers and his own crew.

Illinois ABC Test; Employee Classification Act (Construction)

Statute / agency: 820 ILCS 115/2 (Wage Payment and Collection Act ABC); 820 ILCS 185 (Employee Classification Act); 820 ILCS 405/212 (UI ABC)

Wage-and-hour test: ABC test under the Wage Payment and Collection Act and the Minimum Wage Law. The Employee Classification Act applies a stricter ABC test with a presumption of employment to the construction industry (defined to include HVAC, plumbing, electrical, roofing and all building trades), with a 12-factor test for a sub operating as a legitimate business entity.

Unemployment and workers’ comp: ABC test: the worker is an employee unless (A) free from control in fact and under contract, (B) performs work outside the usual course of the hiring business or away from its places of business, and (C) is customarily engaged in an independently established trade. (UI). Workers’ comp uses a control test in general and follows the Employee Classification Act in construction.

Construction-specific rule: Construction contractors must report payments to individual (non-entity) contractors to the Department of Labor annually, and must post the ECA notice.

Penalties: Employee Classification Act penalties of up to $1,500 per violation per day ($2,500 for repeats within five years), with each worker and each day a separate violation; debarment; a private right of action with treble damages; willful violations are a Class 4 felony. The Department issued over $1 million in ECA penalties in a single year.

Trades note: Illinois enforces the ECA aggressively against residential HVAC, roofing and remodeling contractors; a 1099 installer is the standard case. A “1099 helper” who rides in your van, uses your tools, works your schedule and has no other customers is an employee under every test on this page; the question only gets close for a licensed, insured sub with his own truck, his own customers and his own crew.

Indiana 20-Factor Test; Construction Statute

Statute / agency: Ind. Code § 22-4-8-1 (UI ABC); § 22-3-6-1 (comp); § 22-2-15 (construction misclassification)

Wage-and-hour test: Common-law right-to-control test for wage claims.

Unemployment and workers’ comp: ABC test: the worker is an employee unless (A) free from control in fact and under contract, (B) performs work outside the usual course of the hiring business or away from its places of business, and (C) is customarily engaged in an independently established trade. (UI, by statute). Workers’ comp uses the IRS 20-factor test (§ 22-3-6-1(b)(7)).

Construction-specific rule: Indiana’s construction misclassification statute (2009) requires contractors to classify workers under the IRS 20-factor test and gives the Department of Labor, Department of Revenue and Workforce Development authority to share information and audit.

Penalties: UI, comp and tax assessments; comp penalties for failure to insure.

Trades note: Indiana uses three different tests for three agencies; the UI ABC test is the one that catches a trades sub first. A “1099 helper” who rides in your van, uses your tools, works your schedule and has no other customers is an employee under every test on this page; the question only gets close for a licensed, insured sub with his own truck, his own customers and his own crew.

Iowa Common-Law Control Test

Statute / agency: Iowa Code § 96.19(18) (UI); § 85.61(13) (comp); Iowa Admin. Code 871-23.19

Wage-and-hour test: Right-to-control test for wage claims and UI, with the eight factors in Iowa Admin. Code 871-23.19 (control, tools, payment method, right to terminate, etc.).

Unemployment and workers’ comp: UI uses the same control test; workers’ comp uses right-to-control with the statutory exclusion for an independent contractor who has his own business and works for the public generally. Iowa runs a Misclassification Unit that cross-references UI, comp and tax data.

Penalties: UI and comp assessments with interest; the Misclassification Unit refers willful cases for prosecution.

Trades note: Iowa’s Misclassification Unit audits construction trades disproportionately because the comp rate for construction new employers is 5.4%. A “1099 helper” who rides in your van, uses your tools, works your schedule and has no other customers is an employee under every test on this page; the question only gets close for a licensed, insured sub with his own truck, his own customers and his own crew.

Kansas 20-Factor Test

Statute / agency: K.S.A. § 44-703(i)(3)(D) (UI); § 44-508(b) (comp); K.A.R. 50-1-7

Wage-and-hour test: Common-law right-to-control test for wage claims.

Unemployment and workers’ comp: UI uses the IRS 20-factor test under K.A.R. 50-1-7; workers’ comp uses a right-to-control test with emphasis on the right to terminate without liability.

Penalties: UI and comp assessments; comp penalties for failure to insure.

Trades note: Kansas’s 20 factors are listed in the regulation; walk through them in writing before the audit does. A “1099 helper” who rides in your van, uses your tools, works your schedule and has no other customers is an employee under every test on this page; the question only gets close for a licensed, insured sub with his own truck, his own customers and his own crew.

Kentucky ABC for UI; Control for Wages

Statute / agency: KRS 341.070(2) (UI ABC); KRS 342.640 (comp); KRS 337.010 (wages)

Wage-and-hour test: Right-to-control test for wage claims under KRS Chapter 337.

Unemployment and workers’ comp: ABC test: the worker is an employee unless (A) free from control in fact and under contract, (B) performs work outside the usual course of the hiring business or away from its places of business, and (C) is customarily engaged in an independently established trade. (UI). Workers’ comp uses the Ratliff multi-factor test (nature of the work, control, tools, payment, intent) with emphasis on whether the work is part of the hiring business’s regular trade; a contractor is liable for an uninsured sub’s workers as an up-the-ladder employer (KRS 342.610).

Penalties: UI and comp assessments; comp penalties of $100–$1,000 per employee per day for failure to insure.

Trades note: Kentucky’s up-the-ladder rule means the GC pays the uninsured sub’s claim and then sues the sub. A “1099 helper” who rides in your van, uses your tools, works your schedule and has no other customers is an employee under every test on this page; the question only gets close for a licensed, insured sub with his own truck, his own customers and his own crew.

Louisiana ABC for UI; Control for Wages

Statute / agency: La. R.S. 23:1472(12)(E) (UI ABC); R.S. 23:1021(7) (comp); R.S. 23:1711 (penalties)

Wage-and-hour test: Right-to-control test for wage claims.

Unemployment and workers’ comp: ABC test: the worker is an employee unless (A) free from control in fact and under contract, (B) performs work outside the usual course of the hiring business or away from its places of business, and (C) is customarily engaged in an independently established trade. (UI). Workers’ comp defines an independent contractor by statute and adds the manual labor rule: a contractor who spends a substantial part of his time doing manual labor on the job is covered as an employee even if otherwise independent (R.S. 23:1021(7)).

Construction-specific rule: The comp manual-labor rule effectively makes every working one-person sub in the trades an employee of the hiring contractor for comp purposes unless he carries his own policy.

Penalties: Misclassification penalties under R.S. 23:1711: $250 per worker for a first offense, $500 for a second, $1,000 and possible jail for a third, plus back UI contributions.

Trades note: Louisiana’s manual-labor rule is unique and catches trades subs specifically. A “1099 helper” who rides in your van, uses your tools, works your schedule and has no other customers is an employee under every test on this page; the question only gets close for a licensed, insured sub with his own truck, his own customers and his own crew.

Maine Statutory Multi-Part Test; Predetermination

Statute / agency: 26 M.R.S. § 1043(11)(E) (UI); 39-A M.R.S. § 102(13-A) (comp); § 591-A (penalties)

Wage-and-hour test: Maine’s 2012 uniform test (applied to UI, comp and wage law): the worker must meet all five core criteria (controls the means of the work, has the essential right to control the manner and means, can realize a profit or loss, has a substantial investment or is paid by the job, has a continuing business) and at least three of seven additional criteria (works for others, has his own license or permit, is responsible for his own expenses, advertises, etc.). The Workers’ Compensation Board issues binding predeterminations (Form WCB-266) that a hiring contractor can rely on.

Unemployment and workers’ comp: Same test for UI and comp. The predetermination is good for one year and protects the hiring business from UI and comp assessments if the facts stated are true.

Construction-specific rule: The Board’s predetermination process was built for construction; a one-person sub applies and gives the certificate to every contractor he works for.

Penalties: Knowing misclassification: $2,000–$10,000 per violation (§ 591-A), plus UI and comp assessments; the Attorney General may seek penalties for a pattern.

Trades note: Get the predetermination; it’s the only state-issued document that an auditor is bound by. A “1099 helper” who rides in your van, uses your tools, works your schedule and has no other customers is an employee under every test on this page; the question only gets close for a licensed, insured sub with his own truck, his own customers and his own crew.

Maryland Workplace Fraud Act (Construction and Landscaping ABC)

Statute / agency: Md. Lab. & Empl. § 3-901 et seq. (Workplace Fraud Act); § 8-205 (UI ABC); § 9-202 (comp)

Wage-and-hour test: Common-law test for general wage claims; the Workplace Fraud Act applies an ABC test with a presumption of employment to the construction services and landscaping industries, with an exemption for a worker operating as a business entity that meets the statutory criteria.

Unemployment and workers’ comp: ABC test: the worker is an employee unless (A) free from control in fact and under contract, (B) performs work outside the usual course of the hiring business or away from its places of business, and (C) is customarily engaged in an independently established trade. (UI). Workers’ comp follows the Workplace Fraud Act in construction and landscaping.

Construction-specific rule: Construction employers must give written notice of classification to each contractor and keep records three years; the Department’s Workplace Fraud Unit investigates on complaint and by sweep.

Penalties: Up to $5,000 per misclassified employee (up to $20,000 for knowing and repeat violations), restitution, debarment, and a private right of action with treble damages.

Trades note: The 2024–2026 enforcement reports show HVAC, roofing and drywall as the most-cited trades. A “1099 helper” who rides in your van, uses your tools, works your schedule and has no other customers is an employee under every test on this page; the question only gets close for a licensed, insured sub with his own truck, his own customers and his own crew.

Massachusetts Strictest ABC Test in the Country

Statute / agency: M.G.L. c. 149, § 148B; c. 151A, § 2 (UI); c. 152, § 1(4) (comp)

Wage-and-hour test: ABC test under § 148B for all wage, hour and classification claims, with the strictest prong B in the country: the work must be outside the usual course of the business, period (no “or away from its places of business” alternative). A plumbing company cannot have a plumber as a contractor. There is no business-to-business or construction exemption; a sub organized as an LLC gets no safe harbor if the facts fail the test.

Unemployment and workers’ comp: UI uses an ABC test that includes the “or away from the places of business” alternative for prong B; workers’ comp uses a common-law control test. The Attorney General’s Fair Labor Division enforces § 148B.

Construction-specific rule: None; the Attorney General’s 2008 advisory confirms the construction industry gets no exception.

Penalties: Civil citations up to $25,000 per violation for willful misclassification ($15,000 for non-willful), criminal penalties, debarment, and a private right of action under the Wage Act with mandatory treble damages and attorney fees.

Trades note: Massachusetts trades shops hire W-2 or hire a company, not an individual; there is no middle. A “1099 helper” who rides in your van, uses your tools, works your schedule and has no other customers is an employee under every test on this page; the question only gets close for a licensed, insured sub with his own truck, his own customers and his own crew.

Michigan Economic Reality Test; 20-Factor for UI

Statute / agency: MCL § 421.42(5) (UI, IRS 20-factor); § 418.161(1)(n) (comp); Hoste v. Shanty Creek

Wage-and-hour test: Economic-reality test for wage claims (control, payment of wages, right to hire and fire and discipline, performance of duties as an integral part of the business), as developed by Michigan courts.

Unemployment and workers’ comp: UI uses the IRS 20-factor test by statute (2013 amendment). Workers’ comp excludes from coverage only a worker who (1) maintains a separate business, (2) holds himself out to the public, and (3) is an employer subject to the Act or carries his own coverage; a one-person sub without coverage is the hiring employer’s employee for comp.

Penalties: UI and comp assessments; comp penalties for failure to insure; Michigan’s Payroll Fraud Enforcement Unit (2019) coordinates referrals.

Trades note: The comp three-part rule is the trap: the sub must carry his own comp or be subject to the Act himself to be excluded. A “1099 helper” who rides in your van, uses your tools, works your schedule and has no other customers is an employee under every test on this page; the question only gets close for a licensed, insured sub with his own truck, his own customers and his own crew.

Minnesota 14-Factor Construction Test (2025)

Statute / agency: Minn. Stat. § 181.723 (construction, as amended 2024); § 268.035 (UI); § 176.043 (comp); Minn. R. 5224

Wage-and-hour test: Common-law five-factor test for general wage claims (control, payment, tools, control of premises, right to discharge). In the construction industry, since March 1, 2025, a worker is an employee unless the hiring contractor proves all 14 statutory factors (the sub was established and maintained separately, owns or leases its own equipment, holds its own licenses and insurance, has its own FEIN or files business tax returns, bears the risk of loss, works for others, signs a written contract that specifies the scope and price, etc.) at the time the work is performed.

Unemployment and workers’ comp: UI uses the five-factor common-law test with the Rule 5224 industry criteria; workers’ comp follows § 181.723 in construction and the Rule 5224 criteria elsewhere.

Construction-specific rule: The 14-factor test applies to building construction and improvement of all kinds, including HVAC, plumbing, electrical and remodeling. The Department of Labor and Industry issues stop-work orders and can revoke contractor licenses.

Penalties: Up to $10,000 per misclassified worker per violation (each day and each worker is separate), plus compensatory damages to the worker, stop-work orders, license revocation, and personal liability for owners and officers who knowingly participate. The Attorney General may also enforce.

Trades note: Minnesota’s 2025 law is the toughest construction misclassification statute in the country; a 1099 installer is a $10,000-per-day problem. A “1099 helper” who rides in your van, uses your tools, works your schedule and has no other customers is an employee under every test on this page; the question only gets close for a licensed, insured sub with his own truck, his own customers and his own crew.

Mississippi Common-Law Control Test

Statute / agency: Miss. Code § 71-5-11(J) (UI); § 71-3-3 (comp); common law

Wage-and-hour test: Right-to-control test for wage claims (Mississippi has no state wage-and-hour act; the FLSA governs).

Unemployment and workers’ comp: UI and workers’ comp use right-to-control tests; comp emphasizes who furnishes equipment and whether the worker is paid by the job.

Penalties: UI and comp assessments; no stand-alone misclassification statute.

Trades note: Mississippi is among the most lenient states, but the Workers’ Compensation Commission applies the control test strictly against hiring contractors. A “1099 helper” who rides in your van, uses your tools, works your schedule and has no other customers is an employee under every test on this page; the question only gets close for a licensed, insured sub with his own truck, his own customers and his own crew.

Missouri 20-Factor Test; Right-to-Control for Comp

Statute / agency: RSMo § 288.034(5) (UI, IRS 20-factor); § 287.020 (comp); § 285.500–.515 (misclassification)

Wage-and-hour test: Right-to-control test for wage claims.

Unemployment and workers’ comp: UI uses the IRS 20-factor test by statute. Workers’ comp uses right-to-control and a “relative nature of the work” test; a contractor is liable for an uninsured sub’s workers (§ 287.040).

Construction-specific rule: Missouri’s 2009 misclassification statute (§ 285.500) lets the Attorney General seek penalties of $50 per day per misclassified worker (up to $50,000) and injunctions.

Penalties: $50 per worker per day up to $50,000 under § 285.515, plus UI and comp assessments; knowing failure to insure is a Class A misdemeanor.

Trades note: Missouri’s one-employee comp threshold for construction means a single misclassified helper leaves the shop uninsured. A “1099 helper” who rides in your van, uses your tools, works your schedule and has no other customers is an employee under every test on this page; the question only gets close for a licensed, insured sub with his own truck, his own customers and his own crew.

Montana ICEC Required; AB Test

Statute / agency: MCA § 39-71-417, 39-71-120 (ICEC and comp); § 39-51-201(15) (UI)

Wage-and-hour test: Montana applies a two-part (“AB”) test: the worker must be free from control and engaged in an independently established business, and must hold an Independent Contractor Exemption Certificate (ICEC) from the Department of Labor & Industry or carry his own workers’ comp. Without the ICEC, a one-person sub is conclusively an employee of whoever hires him.

Unemployment and workers’ comp: UI and workers’ comp use the same test and the ICEC requirement. The ICEC costs $125, lasts two years, and is searchable online; hiring contractors are expected to check it.

Construction-specific rule: The ICEC was created for the construction trades; applicants must show a business license, equipment, advertising and other customers.

Penalties: Hiring a worker without an ICEC or coverage makes the hirer liable for the comp claim plus penalties; the Department fines the uninsured employer double the premium and the Independent Contractor Central Unit audits on complaint.

Trades note: No ICEC, no 1099. It’s that simple in Montana. A “1099 helper” who rides in your van, uses your tools, works your schedule and has no other customers is an employee under every test on this page; the question only gets close for a licensed, insured sub with his own truck, his own customers and his own crew.

Nebraska Employee Classification Act (Construction ABC)

Statute / agency: Neb. Rev. Stat. § 48-2901 et seq. (Employee Classification Act); § 48-604(5) (UI ABC)

Wage-and-hour test: Common-law test for general wage claims; the Employee Classification Act applies an ABC test with a presumption of employment to construction (and delivery) contractors, with the standard exemption for a worker operating a legitimate separate business.

Unemployment and workers’ comp: ABC test: the worker is an employee unless (A) free from control in fact and under contract, (B) performs work outside the usual course of the hiring business or away from its places of business, and (C) is customarily engaged in an independently established trade. (UI). Workers’ comp uses a right-to-control test with the construction ECA findings as evidence; a contractor is liable for an uninsured sub’s workers (§ 48-116).

Construction-specific rule: Construction contractors must post the ECA notice and keep records; the Department investigates on complaint and conducts site audits.

Penalties: Up to $500 per misclassified worker for a first offense and $5,000 for subsequent ones, stop-work orders, and debarment from state contracts; a private right of action for the worker.

Trades note: Nebraska’s construction new-employer UI rate is 5.4%, which is the incentive the ECA was written to counter. A “1099 helper” who rides in your van, uses your tools, works your schedule and has no other customers is an employee under every test on this page; the question only gets close for a licensed, insured sub with his own truck, his own customers and his own crew.

Nevada ABC for UI; Statutory Presumption for Wages

Statute / agency: NRS 608.0155 (wage presumption); NRS 612.085 (UI ABC); NRS 616A.255 (comp); NRS 608.400 (penalties)

Wage-and-hour test: Under NRS 608.0155, a worker is conclusively presumed an independent contractor for wage purposes if he holds (or is required to hold) a state or local business license, and meets three of five criteria (controls the means of the work, is paid by the job, can work for others, supplies his own tools, has a substantial investment). Without the license, common law applies.

Unemployment and workers’ comp: ABC test: the worker is an employee unless (A) free from control in fact and under contract, (B) performs work outside the usual course of the hiring business or away from its places of business, and (C) is customarily engaged in an independently established trade. (UI). Workers’ comp uses a control test with a statutory definition of “principal contractor” liability for uninsured subs.

Construction-specific rule: A sub who isn’t licensed by the State Contractors Board (or exempt from licensing) can’t meet the first element of the presumption.

Penalties: Willful misclassification penalties of $2,500 per worker for a first offense and $5,000 for subsequent ones (NRS 608.400), plus UI and comp assessments; the Labor Commissioner publishes violators.

Trades note: Nevada’s presumption is the most contractor-friendly in the West, but it depends on the sub having his own business license and meeting three of five factors in fact. A “1099 helper” who rides in your van, uses your tools, works your schedule and has no other customers is an employee under every test on this page; the question only gets close for a licensed, insured sub with his own truck, his own customers and his own crew.

New Hampshire Statutory Multi-Factor Test (Strict)

Statute / agency: RSA 275:4 (wages, 7 criteria); RSA 282-A:9 (UI); RSA 281-A:2 VI(b) (comp, 12 criteria)

Wage-and-hour test: New Hampshire’s wage law (RSA 275:4) requires all seven statutory criteria for contractor status: the worker has his own FEIN or SSN as a business, controls the means and manner, controls his time, hires his own helpers, holds himself out as a business, is paid by the job, and is not required to work exclusively for the hirer. Workers’ comp (RSA 281-A:2) requires all twelve, adding that the worker is responsible for his own satisfactory completion, has a substantial investment, can realize a profit or loss, and isn’t working under the hirer’s license.

Unemployment and workers’ comp: UI uses an ABC-style test under RSA 282-A:9 IV. The Department of Labor’s Misclassification Task Force coordinates enforcement.

Construction-specific rule: The comp criterion that the worker not perform work “under the hirer’s license or permit” is aimed at trades: a sub working under your electrical or plumbing license is your employee.

Penalties: Civil penalties up to $2,500 per violation under RSA 275:51, plus UI and comp assessments; stop-work orders for uninsured employers.

Trades note: The twelve-criteria comp test is hard for any one-person sub to pass; most New Hampshire shops run helpers as W-2. A “1099 helper” who rides in your van, uses your tools, works your schedule and has no other customers is an employee under every test on this page; the question only gets close for a licensed, insured sub with his own truck, his own customers and his own crew.

New Jersey ABC Test; Final Rule 2026

Statute / agency: N.J.S.A. 43:21-19(i)(6) (UI ABC, applied to wage law by Hargrove, 2015); N.J.A.C. 12:11 (2026 rule); N.J.S.A. 34:1A-1.18 (penalties)

Wage-and-hour test: ABC test for wage-and-hour, wage-payment, earned-sick-leave, UI and temporary-disability law. The Department of Labor’s final ABC rule (May 2026) codifies the factors: prong A looks at actual control and schedule and pay-setting; prong B is satisfied if the work is outside the usual course or performed outside all the employer’s places of business (a worker’s home isn’t the employer’s place of business); prong C requires a business that would survive termination of the relationship. The rule says an IC agreement, an LLC, low pay or multiple jobs don’t by themselves prove anything either way.

Unemployment and workers’ comp: Same ABC test for UI and temporary disability; workers’ comp uses a control and relative-nature-of-the-work test.

Construction-specific rule: The proposed rule’s construction examples (a drywall installer at a drywall company’s sites) were removed from the final rule, but prong B still fails for a plumber working a plumbing company’s jobs.

Penalties: Misclassification penalties up to $250 per misclassified employee for a first violation and $1,000 per employee for subsequent ones, plus up to 5% of the worker’s gross earnings paid to the worker, stop-work orders ($5,000 a day for violating one), license suspension, joint liability for the owner, and public posting of violators. UI and TDI assessments on top.

Trades note: New Jersey’s stop-work orders hit job sites; the Department ran over 200 construction sweeps in 2025. A “1099 helper” who rides in your van, uses your tools, works your schedule and has no other customers is an employee under every test on this page; the question only gets close for a licensed, insured sub with his own truck, his own customers and his own crew.

New Mexico ABC for UI; Control for Wages

Statute / agency: NMSA § 51-1-42(F)(5) (UI ABC); § 52-1-22 (comp); § 50-4-1 (wages)

Wage-and-hour test: Right-to-control test for wage claims under the Minimum Wage Act.

Unemployment and workers’ comp: ABC test: the worker is an employee unless (A) free from control in fact and under contract, (B) performs work outside the usual course of the hiring business or away from its places of business, and (C) is customarily engaged in an independently established trade. (UI). Workers’ comp uses right-to-control with the “relative nature of the work” test; a contractor is liable for an uninsured sub’s workers.

Penalties: UI and comp assessments; the Construction Industries Division can discipline a licensee who uses unlicensed subs.

Trades note: New Mexico’s one-employee comp threshold for construction makes a single misclassified helper an uninsured-employer case. A “1099 helper” who rides in your van, uses your tools, works your schedule and has no other customers is an employee under every test on this page; the question only gets close for a licensed, insured sub with his own truck, his own customers and his own crew.

New York Construction Industry Fair Play Act (ABC)

Statute / agency: N.Y. Labor Law § 861-a et seq. (Construction Industry Fair Play Act); § 511 (UI); § 190 (wages)

Wage-and-hour test: Common-law right-to-control test for general wage claims. In the construction industry (which the Act defines to include HVAC, plumbing, electrical and all building construction, alteration and repair), the Fair Play Act presumes every worker is an employee unless the contractor proves the ABC test or the worker is a separate business entity meeting 12 criteria (its own FEIN, insurance, equipment, customers, written contract, freedom to hire, etc.).

Unemployment and workers’ comp: UI uses a common-law control test with heavy emphasis on supervision, direction and control (the Unemployment Insurance Appeal Board is aggressive); workers’ comp follows the Fair Play Act in construction and the control test elsewhere.

Construction-specific rule: Construction contractors must post the Fair Play Act notice in English and Spanish; the Department’s Joint Enforcement Task Force on Worker Misclassification coordinates sweeps.

Penalties: Fair Play Act penalties of up to $2,500 per misclassified worker for a first violation and $5,000 for repeats within five years, criminal misdemeanor liability for willful violations (up to 30 days and $25,000 for a first offense), debarment, plus UI and comp assessments.

Trades note: New York’s Fair Play Act has been enforced since 2010 and the Appeal Board rarely finds a trades worker independent. A “1099 helper” who rides in your van, uses your tools, works your schedule and has no other customers is an employee under every test on this page; the question only gets close for a licensed, insured sub with his own truck, his own customers and his own crew.

North Carolina Common-Law Control Test; Fair Classification Act

Statute / agency: N.C.G.S. § 143-764 (Employee Fair Classification Act); § 96-1(b)(10) (UI); § 97-2 (comp)

Wage-and-hour test: Common-law right-to-control test (Hayes v. Elon College factors: own business, independent calling, control of time and method, paid by the job, freedom to hire). The Employee Fair Classification Act (2017) doesn’t change the test but created the Employee Classification Section to receive complaints and share them with the UI, comp, revenue and wage agencies, and requires employers to post a notice.

Unemployment and workers’ comp: UI uses the common-law test with the IRS factors; workers’ comp uses the Hayes factors and holds a contractor liable for an uninsured sub’s workers (§ 97-19) unless the sub has three or fewer employees and the contractor obtained a certificate of coverage.

Penalties: UI, comp and tax assessments; the Fair Classification Act added mandatory reporting of violators to licensing boards, which can suspend a contractor’s license.

Trades note: Get a certificate of coverage from every sub; § 97-19 lets you off the hook only if you did. A “1099 helper” who rides in your van, uses your tools, works your schedule and has no other customers is an employee under every test on this page; the question only gets close for a licensed, insured sub with his own truck, his own customers and his own crew.

North Dakota 20-Factor Test

Statute / agency: N.D.C.C. § 52-01-01(17) (UI); § 65-01-03 (comp); N.D. Admin. Code 27-02-14-01

Wage-and-hour test: Common-law right-to-control test for wage claims, applying the IRS 20 factors under N.D. Admin. Code 27-02-14-01.

Unemployment and workers’ comp: UI and Workforce Safety & Insurance both apply the 20-factor test; WSI issues advance determinations of independent contractor status that hiring contractors can rely on.

Penalties: UI and WSI assessments; WSI penalties and personal liability for uninsured employers.

Trades note: WSI’s advance determination is worth getting for any regular sub, given the 9.67% construction new-employer UI rate. A “1099 helper” who rides in your van, uses your tools, works your schedule and has no other customers is an employee under every test on this page; the question only gets close for a licensed, insured sub with his own truck, his own customers and his own crew.

Ohio 20-Factor Test (Construction by Statute)

Statute / agency: R.C. § 4141.01(B)(2)(k) (UI, 20 factors); § 4123.01(A)(1)(c) (comp construction, 20 factors); § 4111.03(D)(1) (overtime)

Wage-and-hour test: Right-to-control test for wage claims; the overtime statute incorporates the FLSA economic-reality test.

Unemployment and workers’ comp: UI applies the IRS 20-factor test by statute. Workers’ comp applies the same 20 factors by statute to construction workers specifically (§ 4123.01(A)(1)(c)), with a presumption of employment unless at least 10 of the 20 factors point to independence; non-construction comp uses common law.

Construction-specific rule: Ohio’s construction comp statute lists the 20 factors in the Revised Code; BWC auditors score them.

Penalties: UI and BWC assessments; BWC charges the uninsured employer the full claim plus a 15% penalty and the employer loses immunity from suit.

Trades note: BWC’s 20-factor scoring is mechanical; a sub who fails 11 factors is an employee for comp regardless of the contract. A “1099 helper” who rides in your van, uses your tools, works your schedule and has no other customers is an employee under every test on this page; the question only gets close for a licensed, insured sub with his own truck, his own customers and his own crew.

Oklahoma 20-Factor Test

Statute / agency: 40 O.S. § 1-210(14) (UI, 20 factors); 85A O.S. § 2(11) (comp)

Wage-and-hour test: Right-to-control test for wage claims.

Unemployment and workers’ comp: UI applies the IRS 20 factors by statute. Workers’ comp defines independent contractor by a statutory list of factors (control, tools, payment, right to terminate) and holds a principal employer liable for an uninsured sub’s workers (85A O.S. § 36).

Penalties: UI and comp assessments; comp penalties of $1,000 a day for failure to insure.

Trades note: Oklahoma’s comp Affidavit of Exempt Status covers owners, not 1099 workers; a sub without his own policy is your comp exposure. A “1099 helper” who rides in your van, uses your tools, works your schedule and has no other customers is an employee under every test on this page; the question only gets close for a licensed, insured sub with his own truck, his own customers and his own crew.

Oregon Statutory Test; CCB Licensing

Statute / agency: ORS 670.600 (uniform definition); ORS 657.040 (UI); ORS 656.027 (comp); ORS 701.021 (CCB)

Wage-and-hour test: Oregon’s uniform statutory test (ORS 670.600) applies to UI, comp, wage and tax law: the worker must be free from direction and control and customarily engaged in an independently established business, shown by at least three of five criteria (maintains a business location, bears the risk of loss, works for two or more different customers or markets to the public, makes a significant investment, has the authority to hire and fire). A worker performing construction work must also hold a Construction Contractors Board license to be an independent contractor.

Unemployment and workers’ comp: Same test for UI and comp. Oregon’s Interagency Compliance Network coordinates UI, comp, revenue and CCB enforcement.

Construction-specific rule: An unlicensed worker doing CCB-licensed work (which includes HVAC, plumbing and electrical under the respective boards) is an employee of the licensed contractor by statute.

Penalties: UI and comp assessments; CCB penalties up to $5,000 per violation for using unlicensed subs; comp penalties of twice the premium.

Trades note: Oregon’s rule is the cleanest: no CCB license, no contractor status. A “1099 helper” who rides in your van, uses your tools, works your schedule and has no other customers is an employee under every test on this page; the question only gets close for a licensed, insured sub with his own truck, his own customers and his own crew.

Pennsylvania Construction Workplace Misclassification Act (Act 72)

Statute / agency: 43 P.S. § 933.1–.17 (Act 72); 43 P.S. § 753(l)(2)(B) (UI ABC-style); 77 P.S. § 22 (comp)

Wage-and-hour test: Common-law control test for general wage claims. In the construction industry, Act 72 (2011) requires that a worker (1) have a written contract, (2) be free from control, and (3) be customarily engaged in an independent business, shown by owning his own tools, realizing profit or loss, having a proprietary interest in his business, maintaining a separate business location, having worked as a contractor before or holding himself out to others, carrying his own liability insurance of at least $50,000, and performing the work under a written contract.

Unemployment and workers’ comp: UI uses a two-part test (free from control and customarily engaged in an independent business) under § 753(l)(2)(B). Workers’ comp follows Act 72 in construction and the common-law test elsewhere; a contractor is liable for an uninsured sub’s workers as a statutory employer (77 P.S. § 52).

Construction-specific rule: Act 72 applies to erecting, altering, repairing and maintaining buildings and their systems, which includes HVAC, plumbing and electrical work. The written contract and the $50,000 liability policy are mandatory elements.

Penalties: Act 72: administrative penalties up to $1,000 per misclassified worker for a first violation and $2,500 for subsequent ones, stop-work orders, criminal penalties for intentional violations (a third-degree misdemeanor, second-degree for repeats), and the Secretary of Labor may petition to enjoin the contractor. The Department issued over $1.5 million in Act 72 penalties in a recent two-year span.

Trades note: No written contract plus no $50,000 GL policy equals an employee in Pennsylvania construction, before any control analysis. A “1099 helper” who rides in your van, uses your tools, works your schedule and has no other customers is an employee under every test on this page; the question only gets close for a licensed, insured sub with his own truck, his own customers and his own crew.

Rhode Island Control Test; Misclassification Statute

Statute / agency: R.I. Gen. Laws § 28-29-17.1 (comp designation); § 28-42-7 (UI); § 37-13-14.1 (misclassification)

Wage-and-hour test: Common-law right-to-control test for wage claims.

Unemployment and workers’ comp: UI uses a right-to-control test with ABC-style factors in the Department’s regulations. Workers’ comp allows a worker to file a Notice of Designation as Independent Contractor (DWC-11-IC) with the Department, which bars his own comp claim against the hirer; without it, the control test applies and the hiring contractor is presumed liable.

Construction-specific rule: Rhode Island’s misclassification statute (§ 37-13-14.1) applies to construction and carries penalties; the Workers’ Compensation Court and Department of Labor coordinate enforcement.

Penalties: $1,500–$3,000 per misclassified employee for a first offense and up to $5,000 for repeats, plus UI and comp assessments, under the 2012 amendments.

Trades note: Get the DWC-11-IC from every one-person sub; it’s the only document that defeats his comp claim against you. A “1099 helper” who rides in your van, uses your tools, works your schedule and has no other customers is an employee under every test on this page; the question only gets close for a licensed, insured sub with his own truck, his own customers and his own crew.

South Carolina Four-Factor Control Test

Statute / agency: S.C. Code § 41-27-230 (UI); § 42-1-130 (comp); Wilkinson v. Palmetto State Transp. (2009)

Wage-and-hour test: Right-to-control test for wage claims using four factors: direct evidence of the right to control, furnishing of equipment, method of payment, and the right to fire.

Unemployment and workers’ comp: UI and workers’ comp apply the same four Wilkinson factors; a contractor is liable for an uninsured sub’s workers as a statutory employer (§ 42-1-400) if the sub’s work is part of the contractor’s trade or business.

Penalties: UI and comp assessments; comp fines of $10–$100 a day for failure to insure.

Trades note: South Carolina’s statutory-employer rule is broad: a plumbing contractor is liable for a 1099 plumber’s injury because plumbing is its trade. A “1099 helper” who rides in your van, uses your tools, works your schedule and has no other customers is an employee under every test on this page; the question only gets close for a licensed, insured sub with his own truck, his own customers and his own crew.

South Dakota Two-Part Statutory Test

Statute / agency: SDCL § 61-1-11 (UI); § 62-1-3 (comp); § 60-11 (wages)

Wage-and-hour test: Right-to-control test for wage claims.

Unemployment and workers’ comp: UI and workers’ comp use a two-part test by statute: the worker must be (1) free from control or direction and (2) customarily engaged in an independently established trade or business. Both prongs must be met; the Department looks for other customers, advertising and investment.

Penalties: UI and comp assessments; comp claims against an uninsured employer in tort.

Trades note: South Dakota’s construction new-employer UI rate (6%) is the reason the Department audits 1099 construction payments. A “1099 helper” who rides in your van, uses your tools, works your schedule and has no other customers is an employee under every test on this page; the question only gets close for a licensed, insured sub with his own truck, his own customers and his own crew.

Tennessee 20-Factor Test by Statute

Statute / agency: Tenn. Code § 50-2-111 (wages, 20 factors, 2020); § 50-7-207 (UI, 20 factors); § 50-6-102 (comp)

Wage-and-hour test: Tennessee adopted the IRS 20-factor test for wage and hour, UI and workers’ comp law in 2020 (Public Chapter 760), replacing the prior ABC test for UI.

Unemployment and workers’ comp: Same 20-factor test. Workers’ comp holds a principal contractor liable for an uninsured sub’s workers (§ 50-6-113), and the Bureau’s Employee Misclassification Education and Enforcement Fund audits construction sites.

Construction-specific rule: The Bureau may penalize a construction services provider that misclassifies workers to avoid comp up to the greater of $1,000 or 1.5 times the premium avoided (§ 50-6-412).

Penalties: Comp penalties under § 50-6-412 plus UI and tax assessments; the Bureau publishes a list of penalized contractors.

Trades note: Tennessee’s 2020 switch to the 20-factor test made it one of the more contractor-friendly states on paper, but the comp enforcement fund still targets construction 1099s. A “1099 helper” who rides in your van, uses your tools, works your schedule and has no other customers is an employee under every test on this page; the question only gets close for a licensed, insured sub with his own truck, his own customers and his own crew.

Texas 20-Factor Test (TWC)

Statute / agency: Tex. Labor Code § 201.041; 40 TAC § 815.134 (20 factors); § 406.121–.123 (comp)

Wage-and-hour test: Right-to-control test for wage claims under the Payday Law; TWC applies the 20 factors in 40 TAC § 815.134 to Payday Law and UI cases alike.

Unemployment and workers’ comp: UI applies the TWC 20-factor rule. Workers’ comp is optional in Texas, but a hiring contractor and a sub may sign a joint agreement under § 406.122 (sub is an independent contractor with its own coverage decision) or § 406.123 (GC provides coverage); without one, a sub who meets the comp definition of independent contractor isn’t the GC’s employee.

Construction-specific rule: TWC’s construction-industry guidance applies the 20 factors with attention to who holds the permits and the license; a worker doing licensed HVAC or plumbing work under your license is an employee.

Penalties: Back UI taxes, interest and penalties; a $200-per-worker penalty for misclassification on government contracts (§ 214.008); no general misclassification penalty.

Trades note: Texas is the most lenient large state, but TWC audits of 1099 payments to individuals are routine and the 20-factor rule is applied against the hiring party. See our Texas guide. A “1099 helper” who rides in your van, uses your tools, works your schedule and has no other customers is an employee under every test on this page; the question only gets close for a licensed, insured sub with his own truck, his own customers and his own crew.

Utah ABC-Style for UI; Statutory Definition for Comp

Statute / agency: Utah Code § 35A-4-204(3) (UI); § 34A-2-104(3) (comp); Utah Admin. Code R994-204-303

Wage-and-hour test: UI applies a two-part test (independently established business and free from control) with detailed regulatory factors (R994-204-303), and the Labor Commission applies the same factors to wage claims.

Unemployment and workers’ comp: Workers’ comp uses a statutory definition requiring that the worker be engaged in an independent business and free from control, and the Commission issues advance Independent Contractor Determinations. Hiring contractors are liable for uninsured subs’ workers (§ 34A-2-103(7)).

Penalties: UI and comp assessments; comp penalties of the greater of $1,000 or three times the premium.

Trades note: Utah’s advance determination and the Workers’ Compensation Coverage Waiver together document a one-person sub properly. A “1099 helper” who rides in your van, uses your tools, works your schedule and has no other customers is an employee under every test on this page; the question only gets close for a licensed, insured sub with his own truck, his own customers and his own crew.

Vermont ABC Test (UI and Comp)

Statute / agency: 21 V.S.A. § 1301(6)(B) (UI ABC); § 601(14) (comp); § 1314a (penalties)

Wage-and-hour test: Right-to-control test for wage claims, but the Department applies the ABC factors in practice.

Unemployment and workers’ comp: ABC test: the worker is an employee unless (A) free from control in fact and under contract, (B) performs work outside the usual course of the hiring business or away from its places of business, and (C) is customarily engaged in an independently established trade. Vermont applies the ABC test to both UI and workers’ comp, with the Department of Labor’s “nature of the business” test for prong B asking whether the work is a regular part of the hiring business. A plumbing company’s 1099 plumber fails prong B.

Construction-specific rule: The 2023 amendments allow a sole proprietor with no employees to be treated as an independent contractor for comp if he files a written certification, but the hiring contractor remains liable if the certification is false.

Penalties: Up to $5,000 per misclassified worker under § 1314a for willful violations, plus UI and comp assessments; stop-work orders for uninsured employers.

Trades note: Vermont’s ABC test for comp is unusual (most states use control for comp) and catches trades subs that other states’ comp tests would pass. A “1099 helper” who rides in your van, uses your tools, works your schedule and has no other customers is an employee under every test on this page; the question only gets close for a licensed, insured sub with his own truck, his own customers and his own crew.

Virginia IRS Test Presumption; Misclassification Penalties

Statute / agency: Va. Code § 40.1-28.7:7 (2020 presumption and penalties); § 58.1-1900 (tax); § 60.2-212 (UI)

Wage-and-hour test: Since July 1, 2020, a worker who performs services for pay is presumed an employee unless the hiring party proves he is an independent contractor under the IRS guidelines (the 20 factors and the three-category control analysis). The presumption applies to wage, UI, comp and tax law.

Unemployment and workers’ comp: Same presumption and IRS test for UI and comp; a contractor counts its subs’ workers toward the three-employee comp threshold (§ 65.2-302).

Penalties: Civil penalties of up to $1,000 per misclassified worker for a first offense, $2,500 for a second and $5,000 for a third, debarment from public contracts for up to a year, a private right of action with attorney fees, and anti-retaliation protection.

Trades note: Virginia’s 2020 law flipped the burden: you prove he’s a contractor, not the other way around. A “1099 helper” who rides in your van, uses your tools, works your schedule and has no other customers is an employee under every test on this page; the question only gets close for a licensed, insured sub with his own truck, his own customers and his own crew.

Washington Six-Part Statutory Test (Seven for Construction)

Statute / agency: RCW 51.08.195 (comp, six/seven-part); RCW 50.04.140 (UI); RCW 49.46 (wages); RCW 18.27 (contractor registration)

Wage-and-hour test: Washington’s Minimum Wage Act uses an economic-dependence test, but the operative test for trades is the six-part test in RCW 51.08.195 (used for comp and, in parallel form, UI): the worker must be free from control, perform work outside the usual course or places of business, be engaged in an independently established business, have an active UBI and tax account, maintain his own books, and (for construction) hold a valid contractor registration or electrical license. All parts must be met.

Unemployment and workers’ comp: L&I applies the six-part (seven for construction) test for comp; the Employment Security Department applies a parallel test for UI. L&I audits contractors for “exempt” workers who are really covered employees.

Construction-specific rule: The seventh element for construction (RCW 51.08.195(7)) means an unregistered sub doing construction work is your employee for comp regardless of the other six.

Penalties: UI and comp assessments; L&I penalties up to $1,000 per worker for failure to secure coverage, plus the claim; RCW 18.27 penalties for hiring unregistered contractors ($1,000 for a first offense).

Trades note: Washington’s test is written as a checklist; the UBI, the books and the contractor registration are the three things a one-person sub usually lacks. A “1099 helper” who rides in your van, uses your tools, works your schedule and has no other customers is an employee under every test on this page; the question only gets close for a licensed, insured sub with his own truck, his own customers and his own crew.

West Virginia Statutory Test (2021)

Statute / agency: W. Va. Code § 21-5I-1 et seq. (West Virginia Employment Law Worker Classification Act, 2021); § 21A-1A-16 (UI ABC)

Wage-and-hour test: The 2021 Act created a uniform test for wage, comp, UI and tax law: a worker is an independent contractor if he signs a written contract stating the intent, and either (1) meets the IRS 20-factor analysis, or (2) is in business for himself (holds a business license or registration, has his own FEIN, controls the means of the work, is paid by the job, and meets three of several additional factors). The UI statute retains its ABC test as an alternative the Act supersedes in most cases.

Unemployment and workers’ comp: Same test for UI and comp under the Act; a contractor remains liable for an uninsured sub’s workers (§ 23-2-1d).

Penalties: UI and comp assessments; comp penalties and loss of immunity for uninsured employers.

Trades note: West Virginia’s written-contract requirement is mandatory; a handshake 1099 fails the first element. A “1099 helper” who rides in your van, uses your tools, works your schedule and has no other customers is an employee under every test on this page; the question only gets close for a licensed, insured sub with his own truck, his own customers and his own crew.

Wisconsin Nine-Factor Statutory Test

Statute / agency: Wis. Stat. § 108.02(12) (UI, 9 of 9 / 6 of 9); § 102.07(8) (comp, 9 factors); § 103.001 (wages)

Wage-and-hour test: Common-law right-to-control test for wage claims.

Unemployment and workers’ comp: UI: a worker is an employee unless the Department finds six of nine statutory conditions met (advertises or holds out to the public, has his own place of business, operates under contracts to perform specific services, incurs the main expenses, is responsible for satisfactory completion, receives compensation on a per-job or commission basis, can realize a profit or loss, has recurring business liabilities, and the relationship doesn’t depend on the hirer). Workers’ comp requires all nine of a parallel list (including his own FEIN or business tax returns and his own comp policy or exemption).

Penalties: UI and comp assessments; comp penalties of up to twice the premium; the Department’s Worker Classification Section investigates construction sites and refers for prosecution.

Trades note: The comp nine-of-nine test, which requires his own FEIN and business tax returns, is where the one-truck sub fails. A “1099 helper” who rides in your van, uses your tools, works your schedule and has no other customers is an employee under every test on this page; the question only gets close for a licensed, insured sub with his own truck, his own customers and his own crew.

Wyoming ABC-Style Statutory Test

Statute / agency: Wyo. Stat. § 27-3-104(b) (UI); § 27-14-102(a)(xxiii) (comp)

Wage-and-hour test: Right-to-control test for wage claims.

Unemployment and workers’ comp: UI and workers’ comp use the same statutory test: the worker is an independent contractor only if he is free from control, represents his services to the public as an independent business, and may substitute another person to perform the work. All three must be shown.

Penalties: UI and comp assessments; comp claims against an uninsured employer bar his common-law defenses.

Trades note: Wyoming’s substitution element is distinctive: if the sub can’t send someone else in his place, he’s an employee. A “1099 helper” who rides in your van, uses your tools, works your schedule and has no other customers is an employee under every test on this page; the question only gets close for a licensed, insured sub with his own truck, his own customers and his own crew.