Labor Standards - Worker Classification

Six Part Test

Part Three - Investment

The worker's investment in equipment or employment of helpers.

Explanation of Part Three

The third part of the six part test to determine if a worker is an employee or an independent contractor is the worker's investment in equipment or employment of helpers.

If the worker invests his or her own money into equipment, such as tools or vehicles, that is an indication that the worker is an independent contractor.

If the worker uses his or her own tools or equipment while performing services for the employer, that is an indication the worker is an independent contractor.

If the worker is reimbursed by the employer for tools and supplies the worker uses on behalf of the employer, that is an indication the worker is an employee.

If the worker uses tools or equipment furnished by the employer, that is an indication the worker is an employee.

If a worker hires, supervises, and pays 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, that is an indication the worker is an independent contractor.

If the person or persons for whom the services are performed (employer) hire, supervise, and pay assistants, that factor generally shows control over the workers on the job.

Case Studies

The department has provided case studies from state and federal court decisions and from LIRC decisions relevant to the factors that make up the employee/ non employee test. View the case studies.


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