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Federal law changes this year have shed new light on employee and contractor classifications. Employers need to take a close look at how employees are classified. As remote work becomes increasingly prevalent, tax professionals face new challenges in navigating the complex landscape of worker classification both for remote staff in our firms as well as when providing guidance to clients. This guide provides a concise overview of the key considerations for determining whether remote workers should be classified as employees or independent contractors.
Understanding Classification Tests
Several tests are used to determine worker classification, each with its own focus. The Common-Law Agency Test, used by federal courts and the EEOC, considers multiple factors related to the employer's right to control the worker. The Economic Realities Test, applied in FLSA cases, examines whether workers are ...