The IRS developed a set of 20 factors that are used to determine independent contractor status. In essence, these factors all revolve around the degree of control an employer has over the worker. The greater the control, the more likely the worker is an employee, and not an independent contractor.

Employers should review each of the 20 factors when deciding whether to assign independent contractor status to a new worker. Employers would be wise to apply this list to any existing 1099 workers to ensure that they have been properly classified. These factors include:

• Instructions. Employees are required to comply with when, where and how to work. Independent contractors are not instructed in detail about how to provide the services for which they are hired.
• Training. Employees are usually trained by one of the employer’s experienced employees, indicating that the employer wants the services performed in a certain manner. Independent contractors receive no training from the purchaser of the services.
• Set hours of work. Employers set the hours of work for the employee. Independent contractors set their own hours.
• Full-time required. Employees work full time for the employer. Independent contracts are free to work when they want – and they can work for as many employers as desired.

Other factors are based on payments, expenses, supplies, termination and the right to quit. For all 20 factors, click here.