Contractor vs. Employee Classifier
PRODetermine worker classification (1099 vs W-2) using IRS 3-factor, DOL 6-factor, and state ABC tests with penalty risk assessment and compliance documentation guidance.
Example Usage
Classify this worker: Sarah works 9-5 Monday-Friday at our office. We provide her laptop and software. She attends team meetings and follows our documented procedures for content creation. She earns $5,000/month salary with no profit/loss opportunity. She has no contract stating contractor status. Should she be 1099 or W-2?
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Suggested Customization
| Description | Default | Your Value |
|---|---|---|
| Duration of work engagement in months | 12 | |
| Level of direction/supervision (low, moderate, high) | moderate | |
| Can worker affect earnings through managerial skill | false | |
| Jurisdiction for classification test (us_federal, ca_abc, ny_common_law, etc.) | us_federal | |
| Who provides tools/equipment (company, contractor, mixed) | company | |
| Work schedule arrangement (set_hours, flexible, self_directed) | set_hours | |
| Whether company offers health, retirement, paid leave | false | |
| Compensation structure (hourly_wage, salary, per_project, invoice) | hourly_wage |
Research Sources
This skill was built using research from these authoritative sources:
- 2024 DOL Rule on Independent Contractor Classification Explains the new 6-factor economic realities test from January 2024 replacing prior rules
- IRS Contractor vs. Employee Test Explained Comprehensive guide to IRS 3-factor test, 20-factor test history, and modern classification approach
- 1099 vs. W-2 Employees: Key Differences & Compliance Detailed comparison of 1099 and W-2 classifications, tests, and transition procedures
- Independent Contractor vs. Employee Classification Updates Updated IRS guidance including Revenue Procedure 2025-10 modifications
- ABC Test for Worker Classification by State State-by-state breakdown showing which states use ABC test vs. Common Law test
- Form SS-8 Guide and Filing Instructions Complete process for requesting official IRS worker status determination
- Deel Worker Classifier Platform AI-powered classification tool using localized case law and 90% accuracy rate
- Gig Worker Classification and Legal Changes Overview of gig worker classification including Proposition 22 and EU Platform Work Directive
- Economic Reality Test In-Depth Analysis Detailed explanation of economic reality test factors and jurisdictional variations
- Misclassification Penalties and Legal Consequences Complete penalty structure for unintentional and intentional misclassification