The Massachusetts Independent Contractor Law provides that an individual performing services shall be considered to be an employee under certain state law chapters, unless all three prongs of this difficult to pass test are met:
- the individual is free from control and direction in connection with the performance of the service, both under his contract for the performance of service and in fact; and
- the service is performed outside the usual course of the business of the employer; and,
- the individual is customarily engaged in an independently established trade, occupation, profession or business of the same nature as that involved in the service performed.
The Massachusetts Attorney General’s Office has provided an advisory on its enforcement of this law: Attorney General’s Advisory.
Under federal law, the 20 question common law test generally governs for IRS purposes, unless a safe harbor exception applies.
Employee or Independent Contractor?
A complicated question. Compliance with the law does not require that you treat all workers as employees. If you are concerned that your business may be found to be misclassifying employees as Independent Contractors, contact us and we will review with you the requirements of the Massachusetts and federal laws.