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Unemployment Insurance - Worker Classification
Part 2: Independent Business - Five 'Keeler' Factors
The second part of the two part test to determine if a worker is an employee or an independent contractor is whether the worker's services were performed as an independently established trade or business in which the individual was customarily engaged.
The purpose of this part of the test is to determine if the worker is operating an independent business separate from that of the employer.
In determining whether the services of the worker were performed as an independently established trade or business in which the individual was customarily engaged, five interrelated factors must be examined. These five interrelated factors are described in Keeler v. LIRC, 154 Wis. 2d 626 (Ct. of App. 1990).
The five Keeler factors are not to be mechanically applied. Rather, the weight and importance of each factor varies according to the specific facts of each case. The five factors should be applied in a manner consistent with the purpose of the unemployment compensation statute: -- "to effect unemployment compensation coverage for workers who are economically dependent on others in respect to their wage-earning status." Larson v. LIRC, 184 Wis.2d 378, 391 (Ct. App. 1994).
The five factors are:
- Factor One: Integration
- Factor Two: Advertising or holding out
- Factor Three: Entrepreneurial risk
- Factor Four: Economic dependence
- Factor Five: Proprietary interest
The department has provided the following tools for each of the five Keeler factors to assist you with the analysis of each of the factors:
- An explanation of each of the five factors
- Cases studies relevant to each of the five factors based upon cases decided by the Labor and Industrial Review Commission (LIRC), Wisconsin Circuit Courts, and Wisconsin Appellate Courts
- A hyperlink to the LIRC Decision Digest for the five factors containing additional cases for your review.