Twenty Factors of the Common Law Test | Offices of Sponsored Programs and Grants Management

The Twenty Factors of the"Common Law Test"

All of the following factors must be considered in determining whether an employment relationship exists:

Twenty Questions	Explanation
Twenty Questions1. Compliance with instructions	ExplanationEmployees must comply with another person's instructions on when, where, and how the work is performed. In a true independent contractor relationship, the only control to which the contractor is subject is the result.
Twenty Questions2. Training required	ExplanationIndependent contractors are not normally trained but rather are hired for their expertise in a field.
Twenty Questions3. Integration of services into business operations	ExplanationIntegration of services into business operations
Twenty Questions4. Services rendered personally	ExplanationEmployees personally render the services, while contractors may delegate such work to others
Twenty Questions5. Hiring, supervising and paying assistants	Explanation Usually individuals who perform all these functions are treated as independent contractors.
Twenty Questions6. Continuing relationship	Explanation Employees are usually hired for an ongoing period, while a contractor's work ends when the job ends.
Twenty Questions7. Set hours of work	Explanation Employees usually must adhere to a work schedule established by the employer
Twenty Questions8. Full-time required	ExplanationGenerally, employees work full-time for an employer, while independent contractors work when and for whom they choose.
Twenty Questions 9. Performing work on the employer's premise	ExplanationThose working at the employer's site may be viewed as employees.
Twenty Questions10. Services performed in order or sequence set	ExplanationPersons told to perform work in a certain sequence generally are considered employees.
Twenty Questions11. Oral or written reports	ExplanationEmployees are more likely to be required to submit regular reports to the employer.
Twenty Questions12. Payment by hour, week, month	ExplanationTypically, employees are paid on a regular basis, while independent contractors are compensated by the job or on a lump-sum or straight commission basis.
Twenty Questions13. Payment of business and/or travel expenses	ExplanationEmployer payments of a person's work-related travel expenses generally indicates employee status.
Twenty Questions14. Furnishing of tools and materials	ExplanationEmployees, not individual contractors, are generally provided with supplies.
Twenty Questions15. Significant investment	ExplanationIndividuals who have a significant personal investment in the facilities they use for work are normally independent contractors.
Twenty Questions16. Realization of profit or loss	ExplanationUnlike employees, independent contractors realize a profit or loss based on their success in performing a service.
Twenty Questions17. Working for more than one firm at a time	ExplanationIndividuals who perform services for a number of employers are usually independent contractors.
Twenty Questions18. Making services available to the general public	ExplanationIndividuals who regularly make their services available to the general public are usually treated as independent contractors.
Twenty Questions19. Right to discharge	ExplanationEmployees can be fired, while independent contractors cannot be discharged if they fulfill contract specifications.
Twenty Questions20. Right to terminate relationship without incurring liability	ExplanationAn employee can terminate his employment relationship with his employer at any time, whereas an independent contractor may be liable for breach of contract for leaving work unfinished.

Independent Contractors