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:
Does the entity have the right to direct and control how the worker performs the specific
task for which the worker is hired?
Does the entity have the right to direct and control the business and financial aspects
of the worker’s activities?
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