In cases where The Social Security Administration (SSA) must determine if a worker
is an employee or an independent contractor, SSA uses the common law test . To determine
whether an individual is an employee or an independent contractor under the common
law test (see RS 02101.020; 20 C.F.R. § 404.1007), SSA will consider all evidence of control and independence,
which falls into three main categories:
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Does the entity have the right to direct and control how the worker performs the specific
task for which the worker is hired?
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Does the entity have the right to direct and control the business and financial aspects
of the worker’s activities?
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What is the relationship of the parties?
A written contract is very important evidence that demonstrates the type of relationship
the parties intended to create. A written agreement describing the worker as an independent
contractor is evidence of the parties’ intent. The facts and circumstances under which
a worker performs services are determinative. The substance of the relationship, not
the label, governs the worker’s status