# What records should I keep to support treating a worker as an independent contractor rather than an employee?

- **[United States (federal) · US businesses engaging workers; federal employment tax purposes]** Where an employer-employee relationship exists, how the relationship is labeled makes no difference — the substance of the relationship, not the label, governs the worker's status — and it does not matter whether the individual is employed full time or part time. → [CG-MCE-052#S01](#s-CG-MCE-052-S01)
- **[United States (federal) · US businesses engaging workers; federal employment tax purposes]** The facts that provide evidence of the degree of control and independence fall into three categories: behavioral control, financial control, and the type of relationship of the parties. → [CG-MCE-052#S05](#s-CG-MCE-052-S05)
- **[United States — federal (Internal Revenue Service / Department of the Treasury); federal employment taxes and income tax withholding · Firms, workers or payers filing Form SS-8 to request an IRS determination of worker status]** Form SS-8 directs the filer to attach copies of all supporting documentation, giving as examples contracts, invoices, memos, Forms W-2, Forms 1099-MISC or Forms 1099-NEC issued or received, IRS closing agreements, and IRS rulings; the list is given as examples and is not stated to be exhaustive. → [CG-MCE-052#S22](#s-CG-MCE-052-S22)
- **[United States — federal tax law (Internal Revenue Code); IRS instructions · Requesters of Form W-9 — persons required to file U.S. information returns (payors/withholding agents)]** A valid Form W-9, or a substitute form, must contain the payee's name and TIN and be signed and dated under penalties of perjury by the payee or a person authorized to sign for the payee. → [CG-MCE-052#S28](#s-CG-MCE-052-S28)
- **[United States (federal) · Every person required by the regulations in 26 CFR part 31 to keep records in respect of an employment tax, whether or not that person incurs liability for the tax]** Subject to the exception in the next sentence for claimants' records, a person required by the part 31 regulations to keep records in respect of a tax — whether or not that person incurs liability for the tax — must maintain those records for at least four years after the later of the due date of the tax for the return period to which the records relate or the date the tax is paid. → [CG-MCE-052#S57](#s-CG-MCE-052-S57)

## What this page establishes

- The federal tax test itself, and how the factors are weighed — Established
- How the state tests differ from the federal tax test — Not established
- What an examiner actually asks for when the classification is challenged — Partly established
- Form W-9: what a valid certification contains, and when it stops being good — Partly established
- How long to keep the file, where to keep it, and in what form — Partly established
- What the business becomes liable for if the classification is overturned — Partly established
- The employment record set that begins at the point of switch-over — Not established
- Start here: what makes someone a contractor is the relationship, not the paperwork — Partly established (Required authority: primary regulator or government. Highest achieved: primary regulator or government.)
- The three dimensions to organise the file around — Established
- The written agreement: keep it, and know what it will not do for you — Partly established
- Evidence that the payee runs a business of their own — Partly established
- Payment records: invoices, how you pay, and what you must not be providing — Partly established
- The identification and certification you take before the first payment — Partly established (Required authority: primary regulator or government. Highest achieved: primary regulator or government.)
- The items in your own file that undermine the position — Not established (Required authority: primary regulator or government. Highest achieved: primary regulator or government.)
- Build the file at engagement - a file assembled after the notice arrives is worth less — Not established (Required authority: primary regulator or government. Highest achieved: primary regulator or government.)
- If the relationship is in fact employment: what would have to exist instead — Not established (Required authority: primary regulator or government. Highest achieved: primary regulator or government.)
- One relationship, several authorities, several tests — Partly established
- How long the position stays open, and what a reclassification costs — Partly established

## Start here: what makes someone a contractor is the relationship, not the paperwork
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- <a id="s-CG-MCE-052-S01"></a>Where an employer-employee relationship exists, how the relationship is labeled makes no difference — the substance of the relationship, not the label, governs the worker's status — and it does not matter whether the individual is employed full time or part time. _(jurisdiction: United States (federal), entity_scope: US businesses engaging workers; federal employment tax purposes, conditions: Publication 15-A (2026) edition, for use in 2026)_ `CG-MCE-052#S01`
  > “If you have an employer-employee relationship, it makes no difference how it is labeled. The substance of the relationship, not the label, governs the worker’s status. It doesn’t matter whether the individual is employed full time or part time.” — [Internal Revenue Service, U.S. Department of the Treasury — Publication 15-A (2026), Employer’s Supplemental Tax Guide](https://www.irs.gov/publications/p15a), 2026-04-30; Publication 15-A - Main Contents, section 1 (Who Are Employees?), under heading “Common-Law Employees”. Verified 2026-09-09.
  _Flagged for professional review — a bookkeeper or accountant should confirm this applies to your situation._

- <a id="s-CG-MCE-052-S02"></a>How a firm classifies a worker is not a choice: for federal employment tax purposes federal law determines whether a worker is an employee, an independent contractor or another category. _(jurisdiction: United States — federal employment tax administration (IRC Subtitle C), Internal Revenue Service, entity_scope: Taxpayers (service recipients) and their workers under IRS employment tax examination; guidance addressed to IRS examiners in LB&I, TE/GE and SB/SE, effective_from: 2023-11-09, conditions: Internal Revenue Manual internal guidance for IRS examiners; applies to federal employment tax examinations)_ `CG-MCE-052#S02`
  > “However, how a firm classifies a worker is not a choice : For federal employment tax purposes, federal law determines whether a worker is an employee, independent contractor, or another category.” — [Internal Revenue Service, U.S. Department of the Treasury — Internal Revenue Manual 4.23.5, Technical Guidelines for Employment Tax Issues](https://www.irs.gov/irm/part4/irm_04-023-005r), 2026-04-30; IRM 4.23.5.4 (11-22-2017), Independent Contractor or Employee. Verified 2026-09-09.
  _Flagged for professional review — a bookkeeper or accountant should confirm this applies to your situation._

- <a id="s-CG-MCE-052-S03"></a>Where an employer-employee relationship exists, the label given the worker (trustee, agent, independent contractor or other title) is of no consequence; signing a contract does not always indicate the worker is self-employed; what governs is the substance of the particular relationship, so taxpayers cannot contract away their employment tax liabilities. _(jurisdiction: United States — federal employment tax administration (IRC Subtitle C), Internal Revenue Service, entity_scope: Taxpayers (service recipients) and their workers under IRS employment tax examination; guidance addressed to IRS examiners in LB&I, TE/GE and SB/SE, effective_from: 2023-11-09, conditions: Internal Revenue Manual internal guidance for IRS examiners; applies to federal employment tax examinations)_ `CG-MCE-052#S03`
  > “When an employer-employee relationship exists, it is of no consequence whether the employee is designated as a trustee, agent, independent contractor, or other title. Additionally, signing a contract does not always indicate the worker is self-employed. What does govern is the substance of a particular relationship, and consequently taxpayers cannot contract away their employment tax liabilities.” — [Internal Revenue Service, U.S. Department of the Treasury — Internal Revenue Manual 4.23.5, Technical Guidelines for Employment Tax Issues](https://www.irs.gov/irm/part4/irm_04-023-005r), 2026-04-30; IRM 4.23.5.5 (02-01-2003), Developing the Facts. Verified 2026-09-09.
  _Flagged for professional review — a bookkeeper or accountant should confirm this applies to your situation._

- <a id="s-CG-MCE-052-S04"></a>The IRS directs the business to document each of the factors used in coming up with the determination. _(jurisdiction: United States (federal), entity_scope: Businesses that pay individuals for services, and the individuals performing those services, conditions: Federal employment taxes and federal income tax withholding only; Common law rules)_ `CG-MCE-052#S04`
  > “Finally, document each of the factors used in coming up with the determination.” — [Internal Revenue Service — Independent contractor (self-employed) or employee?](https://www.irs.gov/businesses/small-businesses-self-employed/independent-contractor-self-employed-or-employee), 2026-05-19; Common law rules — closing paragraph, final sentence. Verified 2026-09-09.
  _Flagged for professional review — a bookkeeper or accountant should confirm this applies to your situation._

_Partly established. Established: that classification is decided by the substance of the working relationship (S01, S03, S14). Missing: that records are evidence of that substance._

_Required authority: primary regulator or government. Highest achieved: primary regulator or government._

## The three dimensions to organise the file around
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- <a id="s-CG-MCE-052-S05"></a>The facts that provide evidence of the degree of control and independence fall into three categories: behavioral control, financial control, and the type of relationship of the parties. _(jurisdiction: United States (federal), entity_scope: US businesses engaging workers; federal employment tax purposes, conditions: Publication 15-A (2026) edition, for use in 2026)_ `CG-MCE-052#S05`
  > “Facts that provide evidence of the degree of control and independence fall into three categories: behavioral control, financial control, and the type of relationship of the parties.” — [Internal Revenue Service, U.S. Department of the Treasury — Publication 15-A (2026), Employer’s Supplemental Tax Guide](https://www.irs.gov/publications/p15a), 2026-04-30; Publication 15-A - Main Contents, section 2 (Employee or Independent Contractor?), under heading “Common-Law Rules”. Verified 2026-09-09.
  _Flagged for professional review — a bookkeeper or accountant should confirm this applies to your situation._

- <a id="s-CG-MCE-052-S06"></a>Behavioral control covers facts that illustrate whether there is a right to direct or control how the worker performs the specific task for which the worker is hired; the facts the exhibit lists under it are instructions and training. _(jurisdiction: United States — federal employment tax administration (IRC Subtitle C), Internal Revenue Service, entity_scope: Taxpayers (service recipients) and their workers under IRS employment tax examination; guidance addressed to IRS examiners in LB&I, TE/GE and SB/SE, effective_from: 2023-11-09, conditions: Internal Revenue Manual internal guidance for IRS examiners; applies to federal employment tax examinations)_ `CG-MCE-052#S06`
  > “Behavioral Control 
 Facts that illustrate whether there is a right to direct or control how the worker performs the specific task for which the worker is hired:
 • Instructions
 • Training” — [Internal Revenue Service, U.S. Department of the Treasury — Internal Revenue Manual 4.23.5, Technical Guidelines for Employment Tax Issues](https://www.irs.gov/irm/part4/irm_04-023-005r), 2026-04-30; Exhibit 4.23.5-1, Determining the Right to Direct or Control, 'Behavioral Control' row. Verified 2026-09-09.
  _Flagged for professional review — a bookkeeper or accountant should confirm this applies to your situation._

- <a id="s-CG-MCE-052-S07"></a>Financial control covers facts that illustrate whether there is a right to direct or control how the business aspects of the worker's activities are conducted; the facts the exhibit lists under it are significant investment by the worker, unreimbursed expenses, services available to the public, method of payment, and opportunity for profit or loss by the worker. _(jurisdiction: United States — federal employment tax administration (IRC Subtitle C), Internal Revenue Service, entity_scope: Taxpayers (service recipients) and their workers under IRS employment tax examination; guidance addressed to IRS examiners in LB&I, TE/GE and SB/SE, effective_from: 2023-11-09, conditions: Internal Revenue Manual internal guidance for IRS examiners; applies to federal employment tax examinations)_ `CG-MCE-052#S07`
  > “Financial Control 
 Facts that illustrate whether there is a right to direct or control how the business aspects of the worker’s activities are conducted:
 • Significant investment by the worker
 • Unreimbursed expenses
 • Services available to the public
 • Method of payment
 • Opportunity for profit or loss by the worker” — [Internal Revenue Service, U.S. Department of the Treasury — Internal Revenue Manual 4.23.5, Technical Guidelines for Employment Tax Issues](https://www.irs.gov/irm/part4/irm_04-023-005r), 2026-04-30; Exhibit 4.23.5-1, Determining the Right to Direct or Control, 'Financial Control' row. Verified 2026-09-09.
  _Flagged for professional review — a bookkeeper or accountant should confirm this applies to your situation._

- <a id="s-CG-MCE-052-S08"></a>Relationship of the parties covers facts that illustrate how the parties perceive their relationship; the facts the exhibit lists under it are employee benefits, intent of parties/written contracts, permanency, discharge/termination, and regular business activity. _(jurisdiction: United States — federal employment tax administration (IRC Subtitle C), Internal Revenue Service, entity_scope: Taxpayers (service recipients) and their workers under IRS employment tax examination; guidance addressed to IRS examiners in LB&I, TE/GE and SB/SE, effective_from: 2023-11-09, conditions: Internal Revenue Manual internal guidance for IRS examiners; applies to federal employment tax examinations)_ `CG-MCE-052#S08`
  > “Relationship of the Parties 
 Facts that illustrate how the parties perceive their relationship:
 • Employee benefits
 • Intent of parties/written contracts
 • Permanency
 • Discharge/Termination
 • Regular business activity” — [Internal Revenue Service, U.S. Department of the Treasury — Internal Revenue Manual 4.23.5, Technical Guidelines for Employment Tax Issues](https://www.irs.gov/irm/part4/irm_04-023-005r), 2026-04-30; Exhibit 4.23.5-1, Determining the Right to Direct or Control, 'Relationship of the Parties' row. Verified 2026-09-09.
  _Flagged for professional review — a bookkeeper or accountant should confirm this applies to your situation._

## The federal tax test itself, and how the factors are weighed
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- <a id="s-CG-MCE-052-S09"></a>Generally, the common law employer-employee relationship exists when the person for whom services are performed has the right to control and direct the individual performing them, not only as to the result to be accomplished but also as to the details and means by which that result is accomplished — that is, the employee is subject to the will and control of the employer as to what shall be done and how it shall be done. _(jurisdiction: United States (federal), entity_scope: individuals performing services and the persons for whom they perform services, for purposes of federal employment taxes under the Federal Insurance Contributions Act (26 CFR part 31, subpart B), effective_from: services performed after 1954, conditions: applies to determinations of employee status under section 3121(d) for FICA employment-tax purposes)_ `CG-MCE-052#S09`
  > “Generally such relationship exists when the person for whom services are performed has the right to control and direct the individual who performs the services, not only as to the result to be accomplished by the work but also as to the details and means by which that result is accomplished. That is, an employee is subject to the will and control of the employer not only as to what shall be done but how it shall be done.” — [Office of the Federal Register / U.S. Department of the Treasury (26 CFR) — 26 CFR 31.3121(d)-1 - Who are employees](https://www.ecfr.gov/current/title-26/section-31.3121(d)-1), 2026-09-04; § 31.3121(d)-1 Who are employees, paragraph (c) Common law employees, (c)(2). Verified 2026-09-09.
  _Flagged for professional review — a bookkeeper or accountant should confirm this applies to your situation._

- <a id="s-CG-MCE-052-S10"></a>In general, an individual subject to another's control or direction merely as to the result to be accomplished, and not as to the means and methods of accomplishing it, is an independent contractor, and an individual performing services as an independent contractor is not, as to such services, an employee under the usual common law rules. _(jurisdiction: United States (federal), entity_scope: individuals performing services and the persons for whom they perform services, for purposes of federal employment taxes under the Federal Insurance Contributions Act (26 CFR part 31, subpart B), effective_from: services performed after 1954, conditions: applies to determinations of employee status under section 3121(d) for FICA employment-tax purposes)_ `CG-MCE-052#S10`
  > “In general, if an individual is subject to the control or direction of another merely as to the result to be accomplished by the work and not as to the means and methods for accomplishing the result, he is an independent contractor. An individual performing services as an independent contractor is not as to such services an employee under the usual common law rules.” — [Office of the Federal Register / U.S. Department of the Treasury (26 CFR) — 26 CFR 31.3121(d)-1 - Who are employees](https://www.ecfr.gov/current/title-26/section-31.3121(d)-1), 2026-09-04; § 31.3121(d)-1 Who are employees, paragraph (c) Common law employees, (c)(2). Verified 2026-09-09.
  _Flagged for professional review — a bookkeeper or accountant should confirm this applies to your situation._

- See above: The facts that provide evidence of the degree of control and independence fall into three categories: behavioral control, financial control, and the type of relationship of the parties. ([CG-MCE-052#S05](#s-CG-MCE-052-S05))

- <a id="s-CG-MCE-052-S11"></a>There is no magic or set number of factors that makes a worker an employee or an independent contractor, and no single factor stands alone in making the determination. _(jurisdiction: United States (federal), entity_scope: Businesses that pay individuals for services, and the individuals performing those services, conditions: Federal employment taxes and federal income tax withholding only; Common law rules)_ `CG-MCE-052#S11`
  > “There is no “magic” or set number of factors that “makes” the worker an employee or an independent contractor and no one factor stands alone in making this determination.” — [Internal Revenue Service — Independent contractor (self-employed) or employee?](https://www.irs.gov/businesses/small-businesses-self-employed/independent-contractor-self-employed-or-employee), 2026-05-19; Common law rules — paragraph following the three categories. Verified 2026-09-09.
  _Flagged for professional review — a bookkeeper or accountant should confirm this applies to your situation._

## The written agreement: keep it, and know what it will not do for you
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- <a id="s-CG-MCE-052-S12"></a>Written contracts describing the relationship the parties intended to create are among the facts that show the parties' type of relationship. _(jurisdiction: United States (federal), entity_scope: US businesses engaging workers; federal employment tax purposes, conditions: Publication 15-A (2026) edition, for use in 2026)_ `CG-MCE-052#S12`
  > “Written contracts describing the relationship the parties intended to create.” — [Internal Revenue Service, U.S. Department of the Treasury — Publication 15-A (2026), Employer’s Supplemental Tax Guide](https://www.irs.gov/publications/p15a), 2026-04-30; Publication 15-A - Main Contents, section 2 (Employee or Independent Contractor?), under heading “Common-Law Rules”, subheading “Type of relationship.”, first listed item. Verified 2026-09-09.

- <a id="s-CG-MCE-052-S13"></a>Where the work is done under a written agreement, a copy of that agreement is to be attached to Form SS-8, preferably signed by both parties. _(jurisdiction: United States — federal (Internal Revenue Service / Department of the Treasury); federal employment taxes and income tax withholding, entity_scope: Firms, workers or payers filing Form SS-8 to request an IRS determination of worker status, conditions: Form SS-8 (Rev. December 2023); applies to the request for an IRS worker-status determination for federal employment tax and income tax withholding purposes)_ `CG-MCE-052#S13`
  > “If “Yes,” attach a copy (preferably signed by both parties).” — [Internal Revenue Service, U.S. Department of the Treasury — Form SS-8, Determination of Worker Status for Purposes of Federal Employment Taxes and Income Tax Withholding](https://www.irs.gov/pub/irs-pdf/fss8.pdf), 2023-12; Page 2, Part I — General Information (continued), line 11a (written agreement). Verified 2026-09-09.

- <a id="s-CG-MCE-052-S14"></a>Where an employer-employee relationship exists, describing the parties as anything other than employer-employee is immaterial, and contractual designation of a worker as an independent contractor cannot outweigh evidence about the actual relationship between worker and taxpayer. _(jurisdiction: United States — federal employment tax administration (IRC Subtitle C), Internal Revenue Service, entity_scope: Taxpayers (service recipients) and their workers under IRS employment tax examination; guidance addressed to IRS examiners in LB&I, TE/GE and SB/SE, effective_from: 2023-11-09, conditions: Internal Revenue Manual internal guidance for IRS examiners; applies to federal employment tax examinations)_ `CG-MCE-052#S14`
  > “If an employer-employee relationship exists, the designation or description of the parties as anything other than that of employer-employee is immaterial. Contractual designation of a worker as an independent contractor cannot outweigh evidence regarding the actual relationship between worker and taxpayer.” — [Internal Revenue Service, U.S. Department of the Treasury — Internal Revenue Manual 4.23.5, Technical Guidelines for Employment Tax Issues](https://www.irs.gov/irm/part4/irm_04-023-005r), 2026-04-30; IRM 4.23.5.7.2 (12-10-2013), Common Law Employees. Verified 2026-09-09.

- See above: Where an employer-employee relationship exists, the label given the worker (trustee, agent, independent contractor or other title) is of no consequence; signing a contract does not always indicate the worker is self-employed; what governs is the substance of the particular relationship, so taxpayers cannot contract away their employment tax liabilities. ([CG-MCE-052#S03](#s-CG-MCE-052-S03))

- <a id="s-CG-MCE-052-S15"></a>An employer designating a worker as an independent contractor, with the worker’s agreement, does not make the worker an independent contractor under the law, and a written agreement does not stop the Division from examining the facts of the relationship. _(jurisdiction: New York State, United States, entity_scope: Employers and workers under the New York State Unemployment Insurance Law (unemployment insurance coverage determinations by the NYS DOL Unemployment Insurance Division))_ `CG-MCE-052#S15`
  > “If an employer designates a worker as an independent contractor and the worker agrees, it does not mean the worker is an
independent contractor under the law. A written agreement does not mean we do not examine the facts of the relationship.” — [New York State Department of Labor, Unemployment Insurance Division — Independent Contractors (IA 318.14)](https://dol.ny.gov/system/files/documents/2024/02/ia318.14.pdf), 2019-08; Page 1 of 2, paragraph beginning “If an employer designates a worker as an independent contractor”. Verified 2026-09-09.

_Partly established. Established: that an agreement which describes independence while daily practice shows control is evidence against the position, not for it (S03, S14). Missing: what the engagement agreement should establish._

## Evidence that the payee runs a business of their own
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- <a id="s-CG-MCE-052-S16"></a>An independent contractor is generally free to seek out business opportunities, and independent contractors often advertise, maintain a visible business location, and are available to work in the relevant market. _(jurisdiction: United States (federal), entity_scope: US businesses engaging workers; federal employment tax purposes, conditions: Publication 15-A (2026) edition, for use in 2026)_ `CG-MCE-052#S16`
  > “An independent contractor is generally free to seek out business opportunities. Independent contractors often advertise, maintain a visible business location, and are available to work in the relevant market.” — [Internal Revenue Service, U.S. Department of the Treasury — Publication 15-A (2026), Employer’s Supplemental Tax Guide](https://www.irs.gov/publications/p15a), 2026-04-30; Publication 15-A - Main Contents, section 2 (Employee or Independent Contractor?), under heading “Common-Law Rules”, subheading “Financial control.”, item “The extent to which the worker makes their services available to the relevant market.”. Verified 2026-09-09.

- <a id="s-CG-MCE-052-S18"></a>Form SS-8 asks for a list of the supplies, equipment, materials and property provided by the firm and, separately, by the worker. _(jurisdiction: United States — federal (Internal Revenue Service / Department of the Treasury); federal employment taxes and income tax withholding, entity_scope: The worker–firm relationship that is the subject of a Form SS-8 determination request, conditions: Form SS-8 (Rev. December 2023); applies to the request for an IRS worker-status determination for federal employment tax and income tax withholding purposes)_ `CG-MCE-052#S18`
  > “List the supplies, equipment, materials, and property provided by” — [Internal Revenue Service, U.S. Department of the Treasury — Form SS-8, Determination of Worker Status for Purposes of Federal Employment Taxes and Income Tax Withholding](https://www.irs.gov/pub/irs-pdf/fss8.pdf), 2023-12; Page 3, Part III — Financial Control, line 1a (“The firm:” / “The worker:”). Verified 2026-09-09.

- <a id="s-CG-MCE-052-S19"></a>In the publication's Building and Construction example 4, on facts including a signed contract for a flat amount, the worker being a licensed roofer carrying workers' compensation and liability insurance under a business name, hiring his own roofers treated as employees, and being responsible for paying for any repairs, the IRS concludes the worker, doing business under that business name, is an independent contractor. _(jurisdiction: United States (federal), entity_scope: US businesses engaging workers; federal employment tax purposes, conditions: Publication 15-A (2026) edition, for use in 2026; illustrative example on the stated facts, not a rule)_ `CG-MCE-052#S19`
  > “Bill Plum contracted with Elm Corporation to complete the roofing on a housing complex. A signed contract established a flat amount for the services rendered by Bill Plum. Bill is a licensed roofer and carries workers’ compensation and liability insurance under the business name, Plum Roofing. Bill hires roofers for Plum Roofing who are treated as employees for federal employment tax purposes. If there is a problem with the roofing work, Plum Roofing is responsible for paying for any repairs. Bill Plum, doing business as Plum Roofing, is an independent contractor.” — [Internal Revenue Service, U.S. Department of the Treasury — Publication 15-A (2026), Employer’s Supplemental Tax Guide](https://www.irs.gov/publications/p15a), 2026-04-30; Publication 15-A - Main Contents, section 2 (Employee or Independent Contractor?), under heading “Industry Examples”, Building and Construction Industry, Example 4. Verified 2026-09-09.

- <a id="s-CG-MCE-052-S20"></a>The page gives incorporation, licensure, advertisements, and routine offerings to provide the services of the independent business to the public or to a number of potential customers as examples, expressly left open by "and the like", of the usual steps taken to establish and promote an independent business. _(jurisdiction: California, United States, entity_scope: hiring entities and workers whose employee / independent-contractor status is determined under California's ABC test, conditions: applies to determining whether a worker is an employee or an independent contractor under the ABC test; page presents a summary of the California Supreme Court's explanation of how to apply the ABC test, not the court's opinion itself; stated as an illustrative example, not as a rule; list is open-ended ("and the like"))_ `CG-MCE-052#S20`
  > “Examples of this include:
 Incorporation, licensure, advertisements,
 Routine offerings to provide the services of the independent business to the public or to a number of potential customers, and the like.” — [California Labor & Workforce Development Agency — ABC Test - Employment Status (LWDA)](https://www.labor.ca.gov/employmentstatus/abctest/), Undated standing page on the LWDA "Independent Contractor vs. Employee" portal; snapshot sha256 0a2bac5c7d073450b29bbb476a6e477467079cf9deae9e2c6efdd8d0705f2d00, retrieved 2026-09-09; PART C — list introduced by "Examples of this include:". Verified 2026-09-09.

- <a id="s-CG-MCE-052-S21"></a>Business cards, stationery and billheads, carrying business insurance, and maintaining an own establishment are listed among the indicators of the independent business an independent contractor has. _(jurisdiction: New York State, United States, entity_scope: Employers and workers under the New York State Unemployment Insurance Law (unemployment insurance coverage determinations by the NYS DOL Unemployment Insurance Division))_ `CG-MCE-052#S21`
  > “o Business cards, stationery and billheads
o Carries business insurance
o Maintains own establishment” — [New York State Department of Labor, Unemployment Insurance Division — Independent Contractors (IA 318.14)](https://dol.ny.gov/system/files/documents/2024/02/ia318.14.pdf), 2019-08; Page 2 of 2, list under “Based on court decisions an independent contractor has:” (right-hand column continuation of the “An independent business” sub-list). Verified 2026-09-09.

_Partly established. Established: how the business records that evidence (S04). Missing: the evidence that the payee operates their own business - registration, insurance, licences, marketing presence, other clients, their own tools and workers; how the business obtains that evidence._

## Payment records: invoices, how you pay, and what you must not be providing
<a id="need-CG-MCE-052-P5"></a>

- <a id="s-CG-MCE-052-S22"></a>Form SS-8 directs the filer to attach copies of all supporting documentation, giving as examples contracts, invoices, memos, Forms W-2, Forms 1099-MISC or Forms 1099-NEC issued or received, IRS closing agreements, and IRS rulings; the list is given as examples and is not stated to be exhaustive. _(jurisdiction: United States — federal (Internal Revenue Service / Department of the Treasury); federal employment taxes and income tax withholding, entity_scope: Firms, workers or payers filing Form SS-8 to request an IRS determination of worker status, conditions: Form SS-8 (Rev. December 2023); applies to the request for an IRS worker-status determination for federal employment tax and income tax withholding purposes)_ `CG-MCE-052#S22`
  > “Attach copies of all supporting documentation (for example, contracts; invoices; memos; Forms W-2, Forms 1099-MISC, or Forms
1099-NEC issued or received; IRS closing agreements; or IRS rulings).” — [Internal Revenue Service, U.S. Department of the Treasury — Form SS-8, Determination of Worker Status for Purposes of Federal Employment Taxes and Income Tax Withholding](https://www.irs.gov/pub/irs-pdf/fss8.pdf), 2023-12; Page 2, Part I — General Information (continued), line 5. Verified 2026-09-09.

- <a id="s-CG-MCE-052-S23"></a>An employee is generally guaranteed a regular wage amount for an hourly, weekly, or other period of time, which usually indicates that a worker is an employee even when the wage or salary is supplemented by a commission; an independent contractor is often paid a flat fee or on a time and materials basis for the job, though it is common in some professions, such as law, to pay independent contractors hourly. _(jurisdiction: United States (federal), entity_scope: US businesses engaging workers; federal employment tax purposes, conditions: Publication 15-A (2026) edition, for use in 2026)_ `CG-MCE-052#S23`
  > “An employee is generally guaranteed a regular wage amount for an hourly, weekly, or other period of time. This usually indicates that a worker is an employee, even when the wage or salary is supplemented by a commission. An independent contractor is often paid a flat fee or on a time and materials basis for the job. However, it is common in some professions, such as law, to pay independent contractors hourly.” — [Internal Revenue Service, U.S. Department of the Treasury — Publication 15-A (2026), Employer’s Supplemental Tax Guide](https://www.irs.gov/publications/p15a), 2026-04-30; Publication 15-A - Main Contents, section 2 (Employee or Independent Contractor?), under heading “Common-Law Rules”, subheading “Financial control.”, item “How the business pays the worker.”. Verified 2026-09-09.

- <a id="s-CG-MCE-052-S24"></a>Form SS-8 asks whether expenses are reimbursed by the firm. _(jurisdiction: United States — federal (Internal Revenue Service / Department of the Treasury); federal employment taxes and income tax withholding, entity_scope: The worker–firm relationship that is the subject of a Form SS-8 determination request, conditions: Form SS-8 (Rev. December 2023); applies to the request for an IRS worker-status determination for federal employment tax and income tax withholding purposes)_ `CG-MCE-052#S24`
  > “Are expenses reimbursed by the firm?” — [Internal Revenue Service, U.S. Department of the Treasury — Form SS-8, Determination of Worker Status for Purposes of Federal Employment Taxes and Income Tax Withholding](https://www.irs.gov/pub/irs-pdf/fss8.pdf), 2023-12; Page 3, Part III — Financial Control, line 4. Verified 2026-09-09.

- <a id="s-CG-MCE-052-S25"></a>Where both a Form W-2 and a Form 1099-MISC, or both a Form W-2 and a Form 1099-NEC, were issued or received for the same worker, the filer must explain why. _(jurisdiction: United States — federal (Internal Revenue Service / Department of the Treasury); federal employment taxes and income tax withholding, entity_scope: Firms, workers or payers filing Form SS-8 to request an IRS determination of worker status, conditions: Form SS-8 (Rev. December 2023); applies to the request for an IRS worker-status determination for federal employment tax and income tax withholding purposes)_ `CG-MCE-052#S25`
  > “If both Form W-2 and Form 1099-MISC, or both Form W-2 and Form 1099-NEC, were issued or received, explain why.” — [Internal Revenue Service, U.S. Department of the Treasury — Form SS-8, Determination of Worker Status for Purposes of Federal Employment Taxes and Income Tax Withholding](https://www.irs.gov/pub/irs-pdf/fss8.pdf), 2023-12; Page 2, Part I — General Information (continued), line 5c. Verified 2026-09-09.

- <a id="s-CG-MCE-052-S26"></a>Providing compensation in the form of a salary, an hourly rate of pay, or a draw account against future commissions with no requirement to repay unearned commissions, is among the listed factors indicating an employer-employee relationship. _(jurisdiction: New York State, United States, entity_scope: Employers and workers under the New York State Unemployment Insurance Law (unemployment insurance coverage determinations by the NYS DOL Unemployment Insurance Division))_ `CG-MCE-052#S26`
  > “• Provides compensation in the form of:
o

Salary

o

An hourly rate of pay or

o

A draw account against future
commissions with no requirement to
repay unearned commissions” — [New York State Department of Labor, Unemployment Insurance Division — Independent Contractors (IA 318.14)](https://dol.ny.gov/system/files/documents/2024/02/ia318.14.pdf), 2019-08; Page 1 of 2, list under “Based on court decisions, an employer-employee relationship exists when an employer:”. Verified 2026-09-09.

_Partly established. Established: invoices raised by the payee (S22); payment tied to deliverables or projects rather than a wage cadence (S23). Missing: the absence of employer-style deductions, benefits and routine cost reimbursement._

## The identification and certification you take before the first payment
<a id="need-CG-MCE-052-P6"></a>

- <a id="s-CG-MCE-052-S27"></a>Persons required to file information returns with the IRS use Form W-9, or an acceptable substitute, to get the payee's (or other person's) correct name and TIN; for individuals the TIN is generally a social security number (SSN). _(jurisdiction: United States — federal tax law (Internal Revenue Code); IRS instructions, entity_scope: Requesters of Form W-9 — persons required to file U.S. information returns (payors/withholding agents))_ `CG-MCE-052#S27`
  > “Form W-9 (or an acceptable substitute) is used by persons required to file information returns with the IRS to get the payee's (or other person's) correct name and TIN. For individuals, the TIN is generally a social security number (SSN).” — [Internal Revenue Service, U.S. Department of the Treasury — Instructions for the Requester of Form W-9 (03/2024)](https://www.irs.gov/instructions/iw9), 2026-04-30; Main Contents — Individual Taxpayer Identification Number (ITIN). Verified 2026-09-09.

- <a id="s-CG-MCE-052-S28"></a>A valid Form W-9, or a substitute form, must contain the payee's name and TIN and be signed and dated under penalties of perjury by the payee or a person authorized to sign for the payee. _(jurisdiction: United States — federal tax law (Internal Revenue Code); IRS instructions, entity_scope: Requesters of Form W-9 — persons required to file U.S. information returns (payors/withholding agents))_ `CG-MCE-052#S28`
  > “A valid Form W-9, or a substitute form, must contain the payee's name and TIN and be signed and dated under penalties of perjury by the payee or a person authorized to sign for the payee.” — [Internal Revenue Service, U.S. Department of the Treasury — Instructions for the Requester of Form W-9 (03/2024)](https://www.irs.gov/instructions/iw9), 2026-04-30; Main Contents — Substitute Form W-9. Verified 2026-09-09.

- <a id="s-CG-MCE-052-S29"></a>A certificate or other documentation becomes invalid on the date the withholding agent knows, or has reason to know, that circumstances affecting the correctness of the certificate or documentation have changed. _(jurisdiction: United States — federal tax law (Internal Revenue Code); IRS instructions, entity_scope: Withholding agents making payments subject to chapter 3 or chapter 4 withholding)_ `CG-MCE-052#S29`
  > “A certificate or other documentation becomes invalid on the date that the withholding agent knows (or has reason to know) that circumstances affecting the correctness of the certificate or documentation have changed. See Pub. 515 for examples. For due diligence requirements applicable to withholding agents under chapter 4, see Regulations section 1.1471-3.” — [Internal Revenue Service, U.S. Department of the Treasury — Instructions for the Requester of Form W-9 (03/2024)](https://www.irs.gov/instructions/iw9), 2026-04-30; Main Contents — Responsibility of a Withholding Agent/Qualified Intermediary (QI)/Nominee. Verified 2026-09-09.

_Partly established. Established: the payee identification and certification records that must be obtained before payment (S27, S28). Missing: their role as part of the classification file._

_Required authority: primary regulator or government. Highest achieved: primary regulator or government._

## Form W-9: what a valid certification contains, and when it stops being good
<a id="need-CG-MCE-052-C4"></a>

- See above: Persons required to file information returns with the IRS use Form W-9, or an acceptable substitute, to get the payee's (or other person's) correct name and TIN; for individuals the TIN is generally a social security number (SSN). ([CG-MCE-052#S27](#s-CG-MCE-052-S27))

- See above: A valid Form W-9, or a substitute form, must contain the payee's name and TIN and be signed and dated under penalties of perjury by the payee or a person authorized to sign for the payee. ([CG-MCE-052#S28](#s-CG-MCE-052-S28))

- See above: A certificate or other documentation becomes invalid on the date the withholding agent knows, or has reason to know, that circumstances affecting the correctness of the certificate or documentation have changed. ([CG-MCE-052#S29](#s-CG-MCE-052-S29))

- <a id="s-CG-MCE-052-S31"></a>Any other reportable payment, such as nonemployee compensation, is subject to backup withholding immediately, even if the payee has applied for and is awaiting a TIN. _(jurisdiction: United States — federal tax law (Internal Revenue Code); IRS instructions, entity_scope: Requesters of Form W-9 — persons required to file U.S. information returns (payors/withholding agents), conditions: payee has applied for and is awaiting a TIN)_ `CG-MCE-052#S31`
  > “Any other reportable payment, such as nonemployee compensation, is subject to backup withholding immediately, even if the payee has applied for and is awaiting a TIN.” — [Internal Revenue Service, U.S. Department of the Treasury — Instructions for the Requester of Form W-9 (03/2024)](https://www.irs.gov/instructions/iw9), 2026-04-30; Main Contents — TIN Applied For. Verified 2026-09-09.

_Partly established. Established: the payee identification and certification a business must obtain before paying a contractor (S27, S28). Missing: when it must be obtained; when it must be refreshed._

## What an examiner actually asks for when the classification is challenged
<a id="need-CG-MCE-052-C3"></a>

- See above: Form SS-8 directs the filer to attach copies of all supporting documentation, giving as examples contracts, invoices, memos, Forms W-2, Forms 1099-MISC or Forms 1099-NEC issued or received, IRS closing agreements, and IRS rulings; the list is given as examples and is not stated to be exhaustive. ([CG-MCE-052#S22](#s-CG-MCE-052-S22))

- <a id="s-CG-MCE-052-S32"></a>The evidence the examiner gathers must be factual and well-documented, and it must support the examiner's determination. _(jurisdiction: United States — federal employment tax administration (IRC Subtitle C), Internal Revenue Service, entity_scope: Taxpayers (service recipients) and their workers under IRS employment tax examination; guidance addressed to IRS examiners in LB&I, TE/GE and SB/SE, effective_from: 2023-11-09, conditions: Internal Revenue Manual internal guidance for IRS examiners; applies to federal employment tax examinations)_ `CG-MCE-052#S32`
  > “The evidence the examiner gathers must be factual and well-documented. It must support the examiner's determination.” — [Internal Revenue Service, U.S. Department of the Treasury — Internal Revenue Manual 4.23.5, Technical Guidelines for Employment Tax Issues](https://www.irs.gov/irm/part4/irm_04-023-005r), 2026-04-30; IRM 4.23.5.7.1 (12-10-2013), Control Test. Verified 2026-09-09.

- See above: Where an employer-employee relationship exists, describing the parties as anything other than employer-employee is immaterial, and contractual designation of a worker as an independent contractor cannot outweigh evidence about the actual relationship between worker and taxpayer. ([CG-MCE-052#S14](#s-CG-MCE-052-S14))

- <a id="s-CG-MCE-052-S33"></a>Advice could not have been relied on unless it was furnished at the time the employment decisions were being made for the periods in issue; the IRM cites In re Compass Marine Corporation, where advice from labor counsel issued three years after the treatment was held not to support that treatment. _(jurisdiction: United States — federal employment tax administration (IRC Subtitle C), Internal Revenue Service, entity_scope: Taxpayers seeking relief under Section 530 of the Revenue Act of 1978 in an IRS worker classification examination, effective_from: 2023-11-09, conditions: Internal Revenue Manual internal guidance for IRS examiners; applies to federal employment tax examinations)_ `CG-MCE-052#S33`
  > “Advice could not have been relied upon unless it had been furnished at the time the employment decisions were being made for the periods in issue. See In re Compass Marine Corporation, 146 B.R. 138 (Bkrpcy E.D. Pa. 1992). In that case, it was held that advice from its labor counsel issued three years after the treatment does not support the treatment.” — [Internal Revenue Service, U.S. Department of the Treasury — Internal Revenue Manual 4.23.5, Technical Guidelines for Employment Tax Issues](https://www.irs.gov/irm/part4/irm_04-023-005r), 2026-04-30; IRM 4.23.5.3.3.7 (11-22-2017), Other Reasonable Basis. Verified 2026-09-09.

_Partly established. Established: what documentation an examining authority actually looks for when a contractor classification is challenged (S22); what weight a written engagement agreement carries when the day-to-day practice of the engagement contradicts what it describes (S03, S14). Missing: how contemporaneous records are weighed against later-assembled ones._

## The items in your own file that undermine the position
<a id="need-CG-MCE-052-P7"></a>

- <a id="s-CG-MCE-052-S34"></a>An employee is generally subject to the business's instructions about when, where, and how to work; the publication gives as examples of types of instructions about how to do work: when and where to do the work, what tools or equipment to use, what workers to hire or to assist with the work, where to purchase supplies and services, what work must be performed by a specified individual, and what order or sequence to follow. _(jurisdiction: United States (federal), entity_scope: US businesses engaging workers; federal employment tax purposes, conditions: Publication 15-A (2026) edition, for use in 2026)_ `CG-MCE-052#S34`
  > “An employee is generally subject to the business’ instructions about when, where, and how to work. All of the following are examples of types of instructions about how to do work. 
 When and where to do the work. 
 What tools or equipment to use. 
 What workers to hire or to assist with the work. 
 Where to purchase supplies and services. 
 What work must be performed by a specified
 individual. 
 What order or sequence to follow.” — [Internal Revenue Service, U.S. Department of the Treasury — Publication 15-A (2026), Employer’s Supplemental Tax Guide](https://www.irs.gov/publications/p15a), 2026-04-30; Publication 15-A - Main Contents, section 2 (Employee or Independent Contractor?), under heading “Common-Law Rules”, subheading “Behavioral control.”, item “Instructions that the business gives to the worker.”. Verified 2026-09-09.
  _Flagged for professional review — a bookkeeper or accountant should confirm this applies to your situation._

- <a id="s-CG-MCE-052-S35"></a>An employee may be trained to perform services in a particular manner, whereas independent contractors ordinarily use their own methods. _(jurisdiction: United States (federal), entity_scope: US businesses engaging workers; federal employment tax purposes, conditions: Publication 15-A (2026) edition, for use in 2026)_ `CG-MCE-052#S35`
  > “An employee may be trained to perform services in a particular manner. Independent contractors ordinarily use their own methods.” — [Internal Revenue Service, U.S. Department of the Treasury — Publication 15-A (2026), Employer’s Supplemental Tax Guide](https://www.irs.gov/publications/p15a), 2026-04-30; Publication 15-A - Main Contents, section 2 (Employee or Independent Contractor?), under heading “Common-Law Rules”, subheading “Behavioral control.”, item “Training that the business gives to the worker.”. Verified 2026-09-09.
  _Flagged for professional review — a bookkeeper or accountant should confirm this applies to your situation._

- <a id="s-CG-MCE-052-S36"></a>Where the worker is required to complete reports, examples of those reports are to be attached to Form SS-8. _(jurisdiction: United States — federal (Internal Revenue Service / Department of the Treasury); federal employment taxes and income tax withholding, entity_scope: Firms, workers or payers filing Form SS-8 to request an IRS determination of worker status, conditions: Form SS-8 (Rev. December 2023); applies to the request for an IRS worker-status determination for federal employment tax and income tax withholding purposes)_ `CG-MCE-052#S36`
  > “If “Yes,” attach examples.” — [Internal Revenue Service, U.S. Department of the Treasury — Form SS-8, Determination of Worker Status for Purposes of Federal Employment Taxes and Income Tax Withholding](https://www.irs.gov/pub/irs-pdf/fss8.pdf), 2023-12; Page 3, Part II — Behavioral Control (continued), line 5 (reports). Verified 2026-09-09.
  _Flagged for professional review — a bookkeeper or accountant should confirm this applies to your situation._

- <a id="s-CG-MCE-052-S38"></a>Providing reimbursement or an allowance for business or travel expenses, providing fringe benefits, and requiring attendance at meetings and/or training are among the listed factors indicating an employer-employee relationship. _(jurisdiction: New York State, United States, entity_scope: Employers and workers under the New York State Unemployment Insurance Law (unemployment insurance coverage determinations by the NYS DOL Unemployment Insurance Division))_ `CG-MCE-052#S38`
  > “• Provides reimbursement or allowance for business
or travel expenses
• Provides fringe benefits

• Requires attendance at meetings and / or
training” — [New York State Department of Labor, Unemployment Insurance Division — Independent Contractors (IA 318.14)](https://dol.ny.gov/system/files/documents/2024/02/ia318.14.pdf), 2019-08; Page 1 of 2, list under “Based on court decisions, an employer-employee relationship exists when an employer:”. Verified 2026-09-09.
  _Flagged for professional review — a bookkeeper or accountant should confirm this applies to your situation._

_Not established from an authoritative source._

_Required authority: primary regulator or government. Highest achieved: primary regulator or government._

## Build the file at engagement - a file assembled after the notice arrives is worth less
<a id="need-CG-MCE-052-P8"></a>

- See above: The IRS directs the business to document each of the factors used in coming up with the determination. ([CG-MCE-052#S04](#s-CG-MCE-052-S04))

- See above: Advice could not have been relied on unless it was furnished at the time the employment decisions were being made for the periods in issue; the IRM cites In re Compass Marine Corporation, where advice from labor counsel issued three years after the treatment was held not to support that treatment. ([CG-MCE-052#S33](#s-CG-MCE-052-S33))

- <a id="s-CG-MCE-052-S39"></a>Whether the taxpayer relied on industry practice can generally be established by several types of evidence: examining taxpayer records such as corporate minutes or unanimous consents in lieu of directors' meetings to see whether any written record exists showing the reason for treating workers as independent contractors, and interviewing the workers themselves about the reasons the taxpayer gave them when establishing their independent contractor status. _(jurisdiction: United States — federal employment tax administration (IRC Subtitle C), Internal Revenue Service, entity_scope: Taxpayers seeking relief under Section 530 of the Revenue Act of 1978 in an IRS worker classification examination, effective_from: 2023-11-09, conditions: Internal Revenue Manual internal guidance for IRS examiners; applies to federal employment tax examinations)_ `CG-MCE-052#S39`
  > “Whether the taxpayer relied on industry practice can generally be established by several types of evidence. Examine taxpayer records, such as corporate minutes or unanimous consents in lieu of director’s meetings, to determine whether any written record exists that shows the reason for treatment of workers as independent contractors. Interview the workers themselves to determine what reasons were given to them by the taxpayer when establishing their status as independent contractors.” — [Internal Revenue Service, U.S. Department of the Treasury — Internal Revenue Manual 4.23.5, Technical Guidelines for Employment Tax Issues](https://www.irs.gov/irm/part4/irm_04-023-005r), 2026-04-30; IRM 4.23.5.3.3.6 (12-10-2013), Safe Haven—Industry Practice. Verified 2026-09-09.

- <a id="s-CG-MCE-052-S40"></a>The first requirement for section 530 relief is timely filing of all required federal tax returns, including information returns such as Form 1099-MISC or Form 1099-NEC for the worker for the period, on a basis consistent with the taxpayer's treatment of the worker as not being an employee. _(jurisdiction: United States — federal employment tax administration (IRC Subtitle C), Internal Revenue Service, entity_scope: Taxpayers seeking relief under Section 530 of the Revenue Act of 1978 in an IRS worker classification examination, effective_from: 2023-11-09, conditions: Internal Revenue Manual internal guidance for IRS examiners; applies to federal employment tax examinations)_ `CG-MCE-052#S40`
  > “The first requirement a taxpayer must meet to obtain section 530 relief is timely filing of all required federal tax returns, including information returns such as Form 1099-MISC or Form 1099-NEC with respect to the worker for the period, on a basis consistent with the treatment of the worker by the taxpayer as not being an employee.” — [Internal Revenue Service, U.S. Department of the Treasury — Internal Revenue Manual 4.23.5, Technical Guidelines for Employment Tax Issues](https://www.irs.gov/irm/part4/irm_04-023-005r), 2026-04-30; IRM 4.23.5.3.3.1 (11-22-2017), Consistency Requirement—Reporting Consistency. Verified 2026-09-09.

_Not established from an authoritative source._

_Required authority: primary regulator or government. Highest achieved: primary regulator or government._

## One relationship, several authorities, several tests
<a id="need-CG-MCE-052-P10"></a>

- <a id="s-CG-MCE-052-S41"></a>Under the ABC test a worker is considered an employee and not an independent contractor unless the hiring entity satisfies all three of the conditions the page then lists. _(jurisdiction: California, United States, entity_scope: hiring entities and workers whose employee / independent-contractor status is determined under California's ABC test, conditions: applies to determining whether a worker is an employee or an independent contractor under the ABC test)_ `CG-MCE-052#S41`
  > “Under the ABC test, a worker is considered an employee and not an independent contractor, unless the hiring entity satisfies  all three  of the following conditions:” — [California Labor & Workforce Development Agency — ABC Test - Employment Status (LWDA)](https://www.labor.ca.gov/employmentstatus/abctest/), Undated standing page on the LWDA "Independent Contractor vs. Employee" portal; snapshot sha256 0a2bac5c7d073450b29bbb476a6e477467079cf9deae9e2c6efdd8d0705f2d00, retrieved 2026-09-09; Heading "What is the ABC test?" — opening sentence. Verified 2026-09-09.
  _Flagged for professional review — a bookkeeper or accountant should confirm this applies to your situation._

- <a id="s-CG-MCE-052-S43"></a>Certain listed persons are employees by law even though the circumstances under which they work may not meet the common law tests of an employer-employee relationship. _(jurisdiction: New York State, United States, entity_scope: Employers and workers under the New York State Unemployment Insurance Law (unemployment insurance coverage determinations by the NYS DOL Unemployment Insurance Division))_ `CG-MCE-052#S43`
  > “The following persons are employees by law even though the circumstances under which they work may not meet the
common law tests of an employer-employee relationship:” — [New York State Department of Labor, Unemployment Insurance Division — Independent Contractors (IA 318.14)](https://dol.ny.gov/system/files/documents/2024/02/ia318.14.pdf), 2019-08; Page 2 of 2, numbered list introduced by “The following persons are employees by law even though the circumstances under which they work may not meet the common law tests…”. Verified 2026-09-09.
  _Flagged for professional review — a bookkeeper or accountant should confirm this applies to your situation._

- <a id="s-CG-MCE-052-S44"></a>If certain requirements are met, section 530 of the Revenue Act of 1978 relieves employers of federal employment tax obligations imposed on the employer under FICA, FUTA, RRTA and FITW; the relief is for federal employment tax purposes only. _(jurisdiction: United States — federal employment tax (Internal Revenue Code, Subtitle C), entity_scope: Employers/taxpayers liable for federal employment taxes under IRC Subtitle C, examined by the IRS, effective_from: 2024-04-17)_ `CG-MCE-052#S44`
  > “If certain requirements are met, Section 530 of the Revenue Act of 1978 (section 530) provides relief to taxpayers for federal employment tax purposes only. The effect of section 530 is to provide employers relief from federal employment tax obligations imposed on the employer under FICA, FUTA, RRTA, and FITW.” — [Internal Revenue Service, U.S. Department of the Treasury — Internal Revenue Manual 4.23.8, Determining Employment Tax Liability](https://www.irs.gov/irm/part4/irm_04-023-008), 2024-04-17; IRM 4.23.8.2(3), Introduction. Verified 2026-09-09.
  _Flagged for professional review — a bookkeeper or accountant should confirm this applies to your situation._

_Partly established. Established: that satisfying one does not settle the others (S44). Missing: that federal tax, wage and hour, state wage, unemployment and workers compensation authorities apply different tests to the same relationship._

## How the state tests differ from the federal tax test
<a id="need-CG-MCE-052-C2"></a>

- <a id="s-CG-MCE-052-S45"></a>One of the three ABC-test conditions the hiring entity must satisfy is that the worker is free from the control and direction of the hiring entity in connection with the performance of the work, both under the contract for the performance of the work and in fact. _(jurisdiction: California, United States, entity_scope: hiring entities and workers whose employee / independent-contractor status is determined under California's ABC test, conditions: applies to determining whether a worker is an employee or an independent contractor under the ABC test)_ `CG-MCE-052#S45`
  > “The worker is free from the control and direction of the hiring entity in connection with the performance of the work, both under the contract for the performance of the work and in fact;” — [California Labor & Workforce Development Agency — ABC Test - Employment Status (LWDA)](https://www.labor.ca.gov/employmentstatus/abctest/), Undated standing page on the LWDA "Independent Contractor vs. Employee" portal; snapshot sha256 0a2bac5c7d073450b29bbb476a6e477467079cf9deae9e2c6efdd8d0705f2d00, retrieved 2026-09-09; Heading "What is the ABC test?" — first of the three listed conditions (condition A). Verified 2026-09-09.
  _Flagged for professional review — a bookkeeper or accountant should confirm this applies to your situation._

- <a id="s-CG-MCE-052-S46"></a>One of the three ABC-test conditions the hiring entity must satisfy is that the worker performs work that is outside the usual course of the hiring entity's business. _(jurisdiction: California, United States, entity_scope: hiring entities and workers whose employee / independent-contractor status is determined under California's ABC test, conditions: applies to determining whether a worker is an employee or an independent contractor under the ABC test)_ `CG-MCE-052#S46`
  > “The worker performs work that is outside the usual course of the hiring entity’s business;  and” — [California Labor & Workforce Development Agency — ABC Test - Employment Status (LWDA)](https://www.labor.ca.gov/employmentstatus/abctest/), Undated standing page on the LWDA "Independent Contractor vs. Employee" portal; snapshot sha256 0a2bac5c7d073450b29bbb476a6e477467079cf9deae9e2c6efdd8d0705f2d00, retrieved 2026-09-09; Heading "What is the ABC test?" — second of the three listed conditions (condition B). Verified 2026-09-09.
  _Flagged for professional review — a bookkeeper or accountant should confirm this applies to your situation._

- <a id="s-CG-MCE-052-S47"></a>One of the three ABC-test conditions the hiring entity must satisfy is that the worker is customarily engaged in an independently established trade, occupation, or business of the same nature as that involved in the work performed. _(jurisdiction: California, United States, entity_scope: hiring entities and workers whose employee / independent-contractor status is determined under California's ABC test, conditions: applies to determining whether a worker is an employee or an independent contractor under the ABC test)_ `CG-MCE-052#S47`
  > “The worker is customarily engaged in an independently established trade, occupation, or business of the same nature as that involved in the work performed.” — [California Labor & Workforce Development Agency — ABC Test - Employment Status (LWDA)](https://www.labor.ca.gov/employmentstatus/abctest/), Undated standing page on the LWDA "Independent Contractor vs. Employee" portal; snapshot sha256 0a2bac5c7d073450b29bbb476a6e477467079cf9deae9e2c6efdd8d0705f2d00, retrieved 2026-09-09; Heading "What is the ABC test?" — third of the three listed conditions (condition C). Verified 2026-09-09.
  _Flagged for professional review — a bookkeeper or accountant should confirm this applies to your situation._

- <a id="s-CG-MCE-052-S48"></a>Under the common law tests the Division must consider all factors about the relationship between the two parties, and must determine whether the party holding the contract for the services provides, or has the right to provide, supervision, direction and control over the person performing the services. _(jurisdiction: New York State, United States, entity_scope: Employers and workers under the New York State Unemployment Insurance Law (unemployment insurance coverage determinations by the NYS DOL Unemployment Insurance Division))_ `CG-MCE-052#S48`
  > “Under the common law tests, we must consider all factors about the relationship between the two
parties. We need to determine if the party who has the contract for the services provides, or has the right to provide,
supervision, direction and control over the person who performs the services.” — [New York State Department of Labor, Unemployment Insurance Division — Independent Contractors (IA 318.14)](https://dol.ny.gov/system/files/documents/2024/02/ia318.14.pdf), 2019-08; Page 1 of 2, paragraph beginning “The law does not define an independent contractor”. Verified 2026-09-09.
  _Flagged for professional review — a bookkeeper or accountant should confirm this applies to your situation._

_Not established from an authoritative source._

## If the relationship is in fact employment: what would have to exist instead
<a id="need-CG-MCE-052-P9"></a>

- <a id="s-CG-MCE-052-S49"></a>An employer must generally withhold federal income taxes, withhold and pay over social security and Medicare taxes, and pay unemployment tax on wages paid to an employee, whereas an employer does not generally have to withhold or pay over any federal taxes on payments to independent contractors. _(jurisdiction: United States (federal), entity_scope: US employers and businesses that pay workers for services; federal employment tax purposes, conditions: Publication 15-A (2026) edition, for use in 2026)_ `CG-MCE-052#S49`
  > “An employer must generally withhold federal income taxes, withhold and pay over social security and Medicare taxes, and pay unemployment tax on wages paid to an employee. An employer doesn’t generally have to withhold or pay over any federal taxes on payments to independent contractors.” — [Internal Revenue Service, U.S. Department of the Treasury — Publication 15-A (2026), Employer’s Supplemental Tax Guide](https://www.irs.gov/publications/p15a), 2026-04-30; Publication 15-A - Main Contents, section 2 (Employee or Independent Contractor?), opening paragraph. Verified 2026-09-09.
  _Flagged for professional review — a bookkeeper or accountant should confirm this applies to your situation._

- <a id="s-CG-MCE-052-S50"></a>Additional record requirements for the Federal Insurance Contributions Act, the Railroad Retirement Tax Act, the Federal Unemployment Tax Act, and the collection of income tax at source on wages are set out, respectively, in §§ 31.6001-2 to 31.6001-5, inclusive. _(jurisdiction: United States (federal), entity_scope: Persons subject to FICA, RRTA, FUTA, or income-tax withholding at source on wages under 26 CFR part 31)_ `CG-MCE-052#S50`
  > “See §§ 31.6001-2 to 31.6001-5 , inclusive, for additional records required with respect to the Federal Insurance Contributions Act, the Railroad Retirement Tax Act, the Federal Unemployment Tax act, and the collection of income tax at source on wages, respectively.” — [Office of the Federal Register / U.S. Department of the Treasury (26 CFR) — 26 CFR 31.6001-1 - Records in general (employment taxes)](https://www.ecfr.gov/current/title-26/section-31.6001-1), 2026-09-04; § 31.6001-1(f) Cross reference. Verified 2026-09-09.
  _Flagged for professional review — a bookkeeper or accountant should confirm this applies to your situation._

- <a id="s-CG-MCE-052-S51"></a>Employers will be advised to prepare Form W–2 or Form W–2c, as applicable, to report the amount of wage adjustments for each individual affected by the employment tax examination. _(jurisdiction: United States — federal employment tax (Internal Revenue Code, Subtitle C), entity_scope: Employers/taxpayers liable for federal employment taxes under IRC Subtitle C, examined by the IRS, effective_from: 2024-04-17)_ `CG-MCE-052#S51`
  > “Employers will be advised to prepare Form W–2 or Form W–2c, whichever is applicable, to report the amount of wage adjustments for each individual who was affected by the employment tax examination.” — [Internal Revenue Service, U.S. Department of the Treasury — Internal Revenue Manual 4.23.8, Determining Employment Tax Liability](https://www.irs.gov/irm/part4/irm_04-023-008), 2024-04-17; IRM 4.23.8.11.1(1), Delinquent Forms W–2/W–2c Secured By Examiner Due to Examination Adjustments. Verified 2026-09-09.
  _Flagged for professional review — a bookkeeper or accountant should confirm this applies to your situation._

- <a id="s-CG-MCE-052-S52"></a>The employer must file Form W–2c by the last day of January following the calendar year in which the employer agrees to the employment tax assessment. _(jurisdiction: United States — federal employment tax (Internal Revenue Code, Subtitle C), entity_scope: Employers/taxpayers liable for federal employment taxes under IRC Subtitle C, examined by the IRS, effective_from: 2024-04-17)_ `CG-MCE-052#S52`
  > “However, the employer must file Form W–2c by the last day of January following the calendar year in which the employer agrees to the employment tax assessment.” — [Internal Revenue Service, U.S. Department of the Treasury — Internal Revenue Manual 4.23.8, Determining Employment Tax Liability](https://www.irs.gov/irm/part4/irm_04-023-008), 2024-04-17; IRM 4.23.8.11.1(9), Delinquent Forms W–2/W–2c Secured By Examiner Due to Examination Adjustments. Verified 2026-09-09.
  _Flagged for professional review — a bookkeeper or accountant should confirm this applies to your situation._

_Not established from an authoritative source._

_Required authority: primary regulator or government. Highest achieved: primary regulator or government._

## The employment record set that begins at the point of switch-over
<a id="need-CG-MCE-052-C7"></a>

- <a id="s-CG-MCE-052-S53"></a>The forms and systems of accounting used must be ones that enable the district director to ascertain whether liability for tax is incurred and, if so, the amount of it. _(jurisdiction: United States (federal), entity_scope: Persons required by the regulations in 26 CFR part 31 to keep records)_ `CG-MCE-052#S53`
  > “Such forms and systems of accounting shall be used as will enable the district director to ascertain whether liability for tax is incurred and, if so, the amount thereof.” — [Office of the Federal Register / U.S. Department of the Treasury (26 CFR) — 26 CFR 31.6001-1 - Records in general (employment taxes)](https://www.ecfr.gov/current/title-26/section-31.6001-1), 2026-09-04; § 31.6001-1(a) Form of records. Verified 2026-09-09.

- <a id="s-CG-MCE-052-S54"></a>A person who is required by the part 31 regulations, or by instructions applicable to a form prescribed under them, to keep a copy of a return, schedule, statement or other document must keep that copy as part of his records. _(jurisdiction: United States (federal), entity_scope: Every person required by 26 CFR part 31, or by instructions to a form prescribed thereunder, to keep a copy of a return, schedule, statement or other document, conditions: Applies only where the regulations or form instructions require a copy to be kept)_ `CG-MCE-052#S54`
  > “Every person who is required, by the regulations in this part or by instructions applicable to any form prescribed thereunder, to keep any copy of any return, schedule, statement, or other document, shall keep such copy as a part of his records.” — [Office of the Federal Register / U.S. Department of the Treasury (26 CFR) — 26 CFR 31.6001-1 - Records in general (employment taxes)](https://www.ecfr.gov/current/title-26/section-31.6001-1), 2026-09-04; § 31.6001-1(b) Copies of returns, schedules, and statements. Verified 2026-09-09.

- See above: Additional record requirements for the Federal Insurance Contributions Act, the Railroad Retirement Tax Act, the Federal Unemployment Tax Act, and the collection of income tax at source on wages are set out, respectively, in §§ 31.6001-2 to 31.6001-5, inclusive. ([CG-MCE-052#S50](#s-CG-MCE-052-S50))

- See above: Employers will be advised to prepare Form W–2 or Form W–2c, as applicable, to report the amount of wage adjustments for each individual affected by the employment tax examination. ([CG-MCE-052#S51](#s-CG-MCE-052-S51))

_Not established from an authoritative source._

## How long to keep the file, where to keep it, and in what form
<a id="need-CG-MCE-052-C5"></a>

- <a id="s-CG-MCE-052-S55"></a>Records required by the employment-tax regulations in 26 CFR part 31 must be kept accurately, but the regulation prescribes no particular form for keeping them. _(jurisdiction: United States (federal), entity_scope: Persons required by the regulations in 26 CFR part 31 (employment taxes and collection of income tax at source) to keep records)_ `CG-MCE-052#S55`
  > “The records required by the regulations in this part shall be kept accurately, but no particular form is required for keeping the records.” — [Office of the Federal Register / U.S. Department of the Treasury (26 CFR) — 26 CFR 31.6001-1 - Records in general (employment taxes)](https://www.ecfr.gov/current/title-26/section-31.6001-1), 2026-09-04; § 31.6001-1(a) Form of records. Verified 2026-09-09.

- <a id="s-CG-MCE-052-S56"></a>All records required by the part 31 regulations must be kept by the person required to keep them at one or more convenient and safe locations accessible to internal revenue officers, and must at all times be available for inspection by those officers. _(jurisdiction: United States (federal), entity_scope: Persons required by the regulations in 26 CFR part 31 to keep records)_ `CG-MCE-052#S56`
  > “All records required by the regulations in this part shall be kept, by the person required to keep them, at one or more convenient and safe locations accessible to internal revenue officers, and shall at all times be available for inspection by such officers.” — [Office of the Federal Register / U.S. Department of the Treasury (26 CFR) — 26 CFR 31.6001-1 - Records in general (employment taxes)](https://www.ecfr.gov/current/title-26/section-31.6001-1), 2026-09-04; § 31.6001-1(e) Place and period for keeping records, paragraph (e)(1). Verified 2026-09-09.

- <a id="s-CG-MCE-052-S57"></a>Subject to the exception in the next sentence for claimants' records, a person required by the part 31 regulations to keep records in respect of a tax — whether or not that person incurs liability for the tax — must maintain those records for at least four years after the later of the due date of the tax for the return period to which the records relate or the date the tax is paid. _(jurisdiction: United States (federal), entity_scope: Every person required by the regulations in 26 CFR part 31 to keep records in respect of an employment tax, whether or not that person incurs liability for the tax, conditions: Except as otherwise provided for claimants' records in the following sentence of (e)(2); Minimum period only — 'at least' four years; Period runs from the later of the tax due date for the return period or the date the tax is paid)_ `CG-MCE-052#S57`
  > “Except as otherwise provided in the following sentence, every person required by the regulations in this part to keep records in respect of a tax (whether or not such person incurs liability for such tax) shall maintain such records for at least four years after the due date of such tax for the return period to which the records relate, or the date such tax is paid, whichever is the later.” — [Office of the Federal Register / U.S. Department of the Treasury (26 CFR) — 26 CFR 31.6001-1 - Records in general (employment taxes)](https://www.ecfr.gov/current/title-26/section-31.6001-1), 2026-09-04; § 31.6001-1(e) Place and period for keeping records, paragraph (e)(2), first sentence. Verified 2026-09-09.
  _Flagged for professional review — a bookkeeper or accountant should confirm this applies to your situation._

- <a id="s-CG-MCE-052-S58"></a>Claimants' records required by paragraph (c) must be maintained for a period of at least four years after the date the claim is filed. _(jurisdiction: United States (federal), entity_scope: Claimants required by § 31.6001-1(c) to keep records, conditions: Minimum period only — 'at least' four years; Period runs from the date the claim is filed)_ `CG-MCE-052#S58`
  > “The records of claimants required by paragraph (c) of this section shall be maintained for a period of at least four years after the date the claim is filed.” — [Office of the Federal Register / U.S. Department of the Treasury (26 CFR) — 26 CFR 31.6001-1 - Records in general (employment taxes)](https://www.ecfr.gov/current/title-26/section-31.6001-1), 2026-09-04; § 31.6001-1(e) Place and period for keeping records, paragraph (e)(2), second sentence. Verified 2026-09-09.

_Partly established. Established: the retention obligation for engagement, contract and payment records supporting a contractor classification (S57). Missing: the period during which the classification remains open to examination._

## How long the position stays open, and what a reclassification costs
<a id="need-CG-MCE-052-P11"></a>

- See above: Subject to the exception in the next sentence for claimants' records, a person required by the part 31 regulations to keep records in respect of a tax — whether or not that person incurs liability for the tax — must maintain those records for at least four years after the later of the due date of the tax for the return period to which the records relate or the date the tax is paid. ([CG-MCE-052#S57](#s-CG-MCE-052-S57))

- <a id="s-CG-MCE-052-S59"></a>Where an employer erroneously treats an employee as a non-employee and does not withhold federal employment taxes, the employer is liable under IRC 3102 and IRC 3403 for the employee's share of FICA and for FITW. _(jurisdiction: United States — federal employment tax (Internal Revenue Code, Subtitle C), entity_scope: Employers/taxpayers liable for federal employment taxes under IRC Subtitle C, examined by the IRS, effective_from: 2018-05-17)_ `CG-MCE-052#S59`
  > “When an employer erroneously treats an employee as a non-employee and does not withhold federal employment taxes, the employer is liable under IRC 3102 and IRC 3403 for the employee's share of FICA and FITW.” — [Internal Revenue Service, U.S. Department of the Treasury — Internal Revenue Manual 4.23.8, Determining Employment Tax Liability](https://www.irs.gov/irm/part4/irm_04-023-008), 2024-04-17; IRM 4.23.8.5(1), IRC Section 3509. Verified 2026-09-09.
  _Flagged for professional review — a bookkeeper or accountant should confirm this applies to your situation._

- <a id="s-CG-MCE-052-S61"></a>In agreed and unagreed cases, IRC 3509 will be applied to all quarterly returns required to be filed for any completed calendar year under examination. _(jurisdiction: United States — federal employment tax (Internal Revenue Code, Subtitle C), entity_scope: Employers/taxpayers liable for federal employment taxes under IRC Subtitle C, examined by the IRS, effective_from: 2024-04-17)_ `CG-MCE-052#S61`
  > “In agreed and unagreed cases, the provisions of IRC 3509 will be applied to all quarterly returns required to be filed for any completed calendar year under examination.” — [Internal Revenue Service, U.S. Department of the Treasury — Internal Revenue Manual 4.23.8, Determining Employment Tax Liability](https://www.irs.gov/irm/part4/irm_04-023-008), 2024-04-17; IRM 4.23.8.5.2(3), Application of IRC 3509. Verified 2026-09-09.
  _Flagged for professional review — a bookkeeper or accountant should confirm this applies to your situation._

_Partly established. Established: how long the classification file must be retained (S57); the class of consequence a reclassification brings for the business (S59, S62, S63, S64). Missing: the window during which the position remains examinable._

## What the business becomes liable for if the classification is overturned
<a id="need-CG-MCE-052-C6"></a>

- <a id="s-CG-MCE-052-S62"></a>Generally, where an employer-employee relationship exists, the employer is liable for FICA, FUTA and federal income tax withholding under IRC 3101, 3102, 3111, 3301, 3402 and 3403. _(jurisdiction: United States — federal employment tax (Internal Revenue Code, Subtitle C), entity_scope: Employers/taxpayers liable for federal employment taxes under IRC Subtitle C, examined by the IRS, effective_from: 2024-04-17)_ `CG-MCE-052#S62`
  > “Generally, if an employer-employee relationship exists, the employer is liable for FICA, FUTA, and FITW under IRC 3101, IRC 3102, IRC 3111, IRC 3301, IRC 3402, and IRC 3403, respectively.” — [Internal Revenue Service, U.S. Department of the Treasury — Internal Revenue Manual 4.23.8, Determining Employment Tax Liability](https://www.irs.gov/irm/part4/irm_04-023-008), 2024-04-17; IRM 4.23.8.2(1), Introduction. Verified 2026-09-09.
  _Flagged for professional review — a bookkeeper or accountant should confirm this applies to your situation._

- <a id="s-CG-MCE-052-S63"></a>IRC 3509 gives reduced rates for FITW and the employee's share of FICA where an employer failed to withhold employment taxes by reason of treating employees as non-employees; "non-employee" includes, but is not limited to, an independent contractor, and the provision does not relieve the employer of any portion of the employer's share of FICA and FUTA taxes. _(jurisdiction: United States — federal employment tax (Internal Revenue Code, Subtitle C), entity_scope: Employers/taxpayers liable for federal employment taxes under IRC Subtitle C, examined by the IRS, effective_from: 2018-05-17)_ `CG-MCE-052#S63`
  > “IRC 3509 provides reduced rates for FITW and the employee's share of FICA if an employer failed to withhold employment taxes by reason of treating such employee(s) as a non-employee(s). A "non-employee" includes, but is not limited to, an independent contractor. The provision does not relieve the employer of any portion of the employer's share of FICA and FUTA taxes.” — [Internal Revenue Service, U.S. Department of the Treasury — Internal Revenue Manual 4.23.8, Determining Employment Tax Liability](https://www.irs.gov/irm/part4/irm_04-023-008), 2024-04-17; IRM 4.23.8.5(2), IRC Section 3509. Verified 2026-09-09.
  _Flagged for professional review — a bookkeeper or accountant should confirm this applies to your situation._

- <a id="s-CG-MCE-052-S64"></a>In substitute for return cases, the failure to file penalty under IRC 6651(a)(1) and the failure to pay penalty under IRC 6651(a)(2) are applicable if there is no reasonable cause for the employer's failure to treat the workers as employees and to file any employment tax returns. _(jurisdiction: United States — federal employment tax (Internal Revenue Code, Subtitle C), entity_scope: Employers/taxpayers liable for federal employment taxes under IRC Subtitle C, examined by the IRS, effective_from: 2024-04-17, conditions: substitute for return case; no reasonable cause)_ `CG-MCE-052#S64`
  > “For substitute for return (SFR) cases, the failure to file penalty (FTF) under IRC 6651(a)(1) and the failure to pay penalty (FTP) under IRC 6651(a)(2) are applicable if there is no reasonable cause for the employer’s failure to treat the workers as employees and to file any employment tax returns.” — [Internal Revenue Service, U.S. Department of the Treasury — Internal Revenue Manual 4.23.8, Determining Employment Tax Liability](https://www.irs.gov/irm/part4/irm_04-023-008), 2024-04-17; IRM 4.23.8.5.1(3), Reduced Tax Rates Under IRC 3509 — "Penalties:". Verified 2026-09-09.
  _Flagged for professional review — a bookkeeper or accountant should confirm this applies to your situation._

- See above: In agreed and unagreed cases, IRC 3509 will be applied to all quarterly returns required to be filed for any completed calendar year under examination. ([CG-MCE-052#S61](#s-CG-MCE-052-S61))

- <a id="s-CG-MCE-052-S65"></a>Failure to report earnings and pay contributions due on the earnings of persons on the assumption that they are independent contractors may result in additional assessments and interest if those persons are later determined to be employees. _(jurisdiction: New York State, United States, entity_scope: Employers and workers under the New York State Unemployment Insurance Law (unemployment insurance coverage determinations by the NYS DOL Unemployment Insurance Division))_ `CG-MCE-052#S65`
  > “Failure to report earnings and pay contributions due on the earnings of
persons on the assumption that they are an independent contractor may result in additional assessments and interest if
they are later determined to be employees.” — [New York State Department of Labor, Unemployment Insurance Division — Independent Contractors (IA 318.14)](https://dol.ny.gov/system/files/documents/2024/02/ia318.14.pdf), 2019-08; Page 2 of 2, closing paragraph beginning “Employers can request a determination”. Verified 2026-09-09.
  _Flagged for professional review — a bookkeeper or accountant should confirm this applies to your situation._

_Partly established. Established: what the business becomes responsible for on a reclassification of a contractor as an employee (S59, S62, S63, S64). Missing: over what period the business becomes responsible._

## Not yet fully established from an authoritative source

- Establish how the tests applied by wage and hour, state wage, unemployment insurance and workers compensation authorities differ from the federal tax test, and that one relationship can be classified differently under each. _(not established)_
- Establish what documentation an examining authority actually looks for when a contractor classification is challenged, and how contemporaneous records are weighed against later-assembled ones, and what weight a written engagement agreement carries when the day-to-day practice of the engagement contradicts what it describes. _(partly established)_
- Establish the payee identification and certification a business must obtain before paying a contractor, when it must be obtained, and when it must be refreshed. _(partly established)_
- Establish the retention obligation for engagement, contract and payment records supporting a contractor classification, and the period during which the classification remains open to examination. _(partly established)_
- Establish the class of consequence that follows a reclassification of a contractor as an employee - what the business becomes responsible for and over what period. _(partly established)_
- Establish the record set an employer must create once a worker is treated as an employee, sufficient to mark what changes at the point of switch-over. _(not established)_
- Establish that classification is decided by the substance of the working relationship and that records are evidence of that substance, so that the reader stops treating the paperwork as the thing that makes someone a contractor. _(partly established; below the required authority class)_
- Specify what the engagement agreement should establish, and establish its limits as evidence: an agreement that describes independence while daily practice shows control is evidence against the position, not for it. _(partly established)_
- Specify the evidence that the payee operates their own business - registration, insurance, licences, marketing presence, other clients, their own tools and workers - and how the business obtains and records it. _(partly established)_
- Specify the payment-record evidence: invoices raised by the payee, payment tied to deliverables or projects rather than a wage cadence, and the absence of employer-style deductions, benefits and routine cost reimbursement. _(partly established)_
- Establish the payee identification and certification records that must be obtained before payment, and their role as part of the classification file. _(partly established; below the required authority class)_
- Identify the items whose presence in a file actively undermines the contractor position - set schedules, mandatory training, performance management, exclusivity, employer-supplied equipment, routine expense reimbursement - and require the answer to say what a business should do when it finds them. _(not established; below the required authority class)_
- Establish the contemporaneity requirement: the file is built at engagement and refreshed during a continuing engagement, and a file assembled after a challenge arrives carries materially less weight. _(not established; below the required authority class)_
- Establish what would have to exist instead if the relationship is in fact employment - the payroll record set, wage statements and payroll filings - and how the reader recognises the point at which the treatment must change. _(not established; below the required authority class)_
- Establish that federal tax, wage and hour, state wage, unemployment and workers compensation authorities apply different tests to the same relationship, so satisfying one does not settle the others. _(partly established)_
- Establish how long the classification file must be retained, the window during which the position remains examinable, and the class of consequence a reclassification brings for the business. _(partly established)_

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_Reference date 2026-09-07. Statements are quoted verbatim from their sources; scope and verification dates are shown on each._