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After determining if the employer has the "right to control" the means and manner of the worker's performance, eleven other factors must be considered before a final determination can be made as to whether the worker is an employee or a non employee. These eleven addition factors are commonly known as the "economic realities test." The eleven factors were developed by the court in the Spirides case to determine if a worker is economically dependent on the employer.
The right to control test is not separate from the economic realities test. The entirety of the circumstances regarding the relationship between the worker and the employer must be considered before determining if the worker is an employee or a non employee.
The department has provided the following tools for each of the eleven factors to assist with the analysis of each of the factors:
The first of eleven additional factors used to determine if a worker is an employee or a non employee is the kind of occupation, with reference to whether the work usually is done under the direction of a supervisor or is done by a specialist without supervision.
If supervision of the worker by the employer is required, then it is an indication that the worker is an employee.
An employee is required to comply with the instructions or orders of the employer. Instructions may be given in various forms, such as written policies and procedures. An employer does not generally provide a non employee with instructions on how to perform the work. Non employees are generally considered to be specialists who are able to perform their jobs without supervision.
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
The second of eleven additional factors used to determine if a worker is an employee or a non employee is the skill required in the particular occupation.
Workers who have a special skill and exercise initiative in obtaining clients or jobs are more likely to be non employees. For example, some workers such as plumbers, electricians and accountants have special skills obtained through education and experience.
Workers whose jobs require a low level of skill and experience are more likely to be employees.
A worker with a special skill who advertises for work in the yellow pages, has business cards and has his or her own office is more likely to be a non employee.
A worker who performs routine tasks requiring little training in a facility belonging to the employer is more likely to be an employee.
A highly educated and skilled worker is not necessarily a non employee because of the skill the worker possesses. For example, an accountant has a private practice. The accountant bears all the expenses of the practice and keeps all the fees from his or her clients. The accountant then closes his or her private practice and goes to work for a large accounting firm. The firm directs and controls what the accountant does by assigning work and setting hours and paying the accountant a salary and benefits. The accountant has become an employee.
Not all workers who do not possess special skills are employees. For example, a janitor who advertises his or her services and cleans offices for several different businesses may be a non employee because he or she is not under the direction and control of an employer.
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
The third of eleven additional factors used to determine if a worker is an employee or a non employee is whether the "employer" or the individual in question furnishes the equipment used and the place of work.
If the worker invests his or her own money into equipment, such as tools or vehicles, that is an indication that the worker is a non employee.
If the worker uses his or her own tools or equipment while performing services for the employer, that is an indication the worker is a non employee.
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 the employer furnishes the worker with a place to perform the work (office, factory, warehouse, etc), that is an indication that the worker is an employee.
If the worker utilizes his or her own facilities to perform the work for the employer, that is an indication that the worker is a non employee.
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
The fourth of eleven factors used to determine if a worker is an employee or a non employee is the length of time during which the individual has worked.
Employment relationships tend to be of longer duration or are more likely to be of indefinite length. Non employment relationships are generally of shorter duration and involve the completion of a specific project or service.
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
The fifth of eleven additional factors used to determine if a worker is an employee or non employee is the method of payment, whether by time or by the job.
If a worker is paid by the employer based upon the amount of time spent on the job, that is strong evidence the worker is an employee. "Time" can mean an hourly wage, or a salary that is paid on a regular, recurring basis.
If the worker is paid by the employer based on a per job or per assignment basis, that is evidence that the worker is a non employee. An express contract to pay by the job is strong evidence that an employer/employee relationship does not exist.
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
The sixth of eleven additional factors used to determine if a worker is an employee or a non employee is the manner in which the work relationship is terminated, i.e. by one or both parties, with or without notice and explanation.
If the employer has the sole right to discharge or terminate the worker, that is an indication that the worker is an employee.
If either the employer or the worker has the right to end the relationship between them, that is an indication that the worker is a non employee.
If the contract between the worker and the employer provides for consequences for terminating the relationship, that is an indication that the worker is a non employee.
If there is an ending date contemplated upon completion of the work, that is an indication that the worker is a non employee.
If there is a continuing open ended relationship with no termination date between the worker and the employer, that is an indication that the worker is an employee.
If there is a contract between the worker and the employer that is subject to automatic renewal, that is an indication that the worker is an employee.
If there is a contract between the worker and the employer that calls for a periodic review and renegotiation between both parties, that is an indication that the worker is a non employee.
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
The seventh of eleven additional factors used to determine if a worker is an employee or a non employee is whether annual leave is afforded.
Receiving annual leave or vacation from the employer is an indication that the worker is an employee. Annual leave is a benefit that employees receive from their employers; non employees generally do not receive benefits from their employers. Receiving annual leave and/or other benefits is an indication that the worker is economically dependent on the employer.
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
The eighth of eleven additional factors used to determine if a worker is an employee or a non employee is whether the work is an integral part of the business of the employer.
The services provided to the employer by the worker must be substantially different from the employer's business for the worker to be considered a non employee. The services provided by the worker to the employer should not be directly related to, or integrated into, the employer's business.
The services provided by the worker are directly related to, or integrated into, the employer's business when the success or continuation of the employer's business depends upon the performance of those services.
For example, where an employer that manufactures furniture engages a worker to fabricate upholstery for chairs that the employer sells, the worker's services performed to make or assemble the upholstery material for the chairs is directly related or integrated into the employer's product.
On the other hand, where a worker is hired to paint the building in which the employer's manufacturing business is located, the painting work is not integrated into the business activity of the employer.
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
The ninth of eleven additional factors used to determine if a worker is an employee or a non employee is whether the worker accumulates retirement benefits.
Accumulating retirement benefits from an employer is an indication that a worker is an employee. Non employees are generally responsible for providing for their own retirements. Accumulating retirement benefits and/or other benefits from an employer is an indication that the worker is economically dependent on the employer.
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
The tenth of eleven additional factors used to determine if a worker is an employee or a non employee is whether the "employer" pays social security taxes.
If the employer pays social security taxes for the worker, that is an indication the worker is an employee. Non employees are responsible for the entire amount of their social security tax. There is no employer portion of the social security tax for a non employee.
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
The eleventh and final factor used to determine if a worker is an employee or a non employee is the intention of the parties.
If the employer and the worker have an agreement, either written or verbal, that the worker will provide services for the employer as a non employee, that is an indicator that the worker is a not an employee. Conversely, if the employer and the worker have an agreement, either written or verbal, that the worker is an employee, it is strong evidence that the worker is an employee.
It should be noted, however, that the intent of the parties alone cannot waive protections granted to an individual under a legislative act. Thus, intent to make the individual an employee of the client is more likely to prove the relationship than the opposite intent is to disprove it.
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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