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?

As noted in RS 02101.810, SSA and the Internal Revenue Service (IRS) have independent authority to apply the common law test to determine if a worker is an employee or an independent contractor. The following standards govern which agency's authority applies:

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  For questions concerning whether a worker is an employee for purposes of coverage under a State's Section 218 Agreement or to resolve earnings discrepancies, SSA will resolve the question.

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  For questions concerning whether a worker is an employee for purposes of the Federal Insurance Contributions Act (FICA) tax withholding, IRS will resolve the question.