Worker's Compensation - Worker Classification

Independent Contractor

Nine Requirements Test

To be considered an independent contractor and not an employee, an individual must meet and maintain all nine of the following requirements:

  1. Requirement One: Maintain a separate business
  2. Requirement Two: Obtain a Federal Employer Identification Number or has filed business or self-employment income tax returns with the IRS based on the work or service in the previous year.
  3. Requirement Three: Operate under specific contracts
  4. Requirement Four: Be responsible for operating expenses under the contract
  5. Requirement Five: Be responsible for satisfactory performance of the work under the contracts
  6. Requirement Six: Be paid per contract, per job, by commission or by competitive bid
  7. Requirement Seven: Be subject to profit or loss in performing the work under the contracts
  8. Requirement Eight: Have recurring business liabilities and obligations
  9. Requirement Nine: Be in a position to succeed or fail if business expenses exceed income

To assist the employer in the analysis, the department has provided the following:

  1. An explanation of each of the requirements contained in the nine part test
  2. Case studies relevant to each of the requirements based upon cases decided by the Labor and Industry Review Commission (LIRC), Wisconsin Circuit Courts and Wisconsin Appellate Courts
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