Internal Revenue Service Common Law Guidelines The following descriptions are meant to be an aid to determining whether an individual is an employee under the common law rules. These factors have been developed based on an examination of cases and rulings considering whether an individual is an employee.
		The degree of importance of each factor varies depending on the occupation and the factual context in which the services are performed. These twenty factors are designed only as guides for determining whether an individual is an employee. Special scrutiny is required in applying the twenty factors to assure that formalistic aspects of an arrangement designed to achieve a particular status do not obscure the substance of the arrangement. This information taken from IRS Common Law Guidelines Attachment to Service Provider Instructions.  Instructions: An individual who is required to comply with other person's instructions about when, where and how he/she is to work is ordinarily an employee.  Training: Training an individual by requiring an experienced employee to work with the person, by corresponding with the worker, by requiring the worker to attend meetings, or by using other methods indicates that the person or persons for whom the services are performed want the services performed in a particular method or manner.  Integration: Integration of the worker's services into the business operations generally shows that the worker is subject to direction and control.  Services Rendered Personally: If the services must be rendered personally, presumably the person or persons for whom the services are performed are interested in the methods used to accomplish the work as well as the results.  Hiring, Supervising and Paying Assistants: If the person or persons for whom the services are performed hire, supervise and pay assistants, that factor generally shows control over the workers on the job. However, if one worker hires, supervises and pays the other assistants pursuant to a contract under which the worker agrees to provide materials and labor and under which the worker is responsible only for the attainment of a result, this factor indicates an independent contractor status.  Continuing Relationship: A continuing relationship between the worker and the person or persons for whom the services are performed indicates that an employer-employee relationship exists. A continuing relationship may exist where work is performed at frequently recurring although irregular intervals.  Set Hours of Work: The establishment of set hours of work by the person or persons for whom the services are performed is a factor indicating control.  Full Time Required: If the worker must devote substantially full time to the business of the person or persons for whom the services are performed, such person or persons have control over the amount of time the worker spends working and impliedly restrict the worker from doing other gainful work. An independent contractor, on the other hand, is free to work when and for whom he or she chooses.  Doing Work on Employer's Premises: If the work is performed on the premises of the person or persons for whom the services are performed, that factor suggests control over the worker, especially if the work could be done elsewhere. Work done off the premises of the person or persons receiving the services, such as at the office of the worker, indicates some freedom of control. The importance of this factor depends on the nature of the service involved and the extent to which an employer generally would require that employees perform such services on the employer's premises. Control over the place of work is indicated when the person or persons from whom the services are performed have the right to compel the worker to work at specific places as required.  Order or Sequence Set: If a worker must perform services in the order or sequence set by the person or persons for whom the services are performed, that factor shows that the worker is not free to follow the worker's own pattern of work but must follow established routines and schedules of the person or persons are performed. Oral or Written Reports: A requirement that the worker submit regular or written reports to the person or persons for whom the services are performed indicates a degree of control.  Payment by Hour, Week, Month: Payment by the hour, week, or month generally points to an employer/employee relationship, provided that this method of payment is not just a convenient way of paying a lump sum agreed upon as the cost of a job. Payment made by the job generally indicates that the worker is an independent contractor.  Payment of Business and/or Traveling Expenses:  If the person or persons for whom the services are performed ordinarily pay the traveling expenses, the worker is ordinarily an employee. An employer, to be able to control expenses, generally retains the right to regulate and direct the worker's business activities.  Furnishing of Tool and Materials: The fact that the person or persons for whom the services are performed furnish significant tools, materials and other equipment tends to show the existence of an employer/ employee relationship.  Significant Investment: If the worker invests in facilities that are used by the worker in performing services and are not typically maintained by employees, that factor tends to indicate that the worker is an independent contractor.  Realization of Profit or Loss:  A worker who can realize a profit or suffer a loss as a result of the worker services is generally an independent contractor, but the worker who cannot is an employee.  Working for More than One Firm at a Time: If a worker performs more than de minimis services for a multiple of unrelated persons or firms at the same time, that factor generally indicates that the worker is an independent contractor.  Making Service Available to General Public: The fact that a worker makes his/her services available to the general public on a regular and consistent basis indicates an independent contractor relationship.  Right to Discharge: The right to discharge a worker is a factor indicating that the worker is an employee and the person possessing the right is an employer. An employer exercises control through the threat of dismissal, which causes the worker to obey the employer's instructions. An independent contractor, on the other hand, cannot be fired so long as the independent contractor produces a result that meets the contract specifications.  Right to Terminate:  If the worker has the right to end his/her relationship with the person for whom the services are performed at any time he/she wishes without incurring liability, that factor indicates an employer/employee relationship.