Am I an Employer?

IMPORTANT: Please n0te: Being an employer in general (as described in this FAQ) may be different than being an employer in terms of employment taxes you may owe -- see the FAQ entitled "What about Taxes?"

The 3-Pronged Test under Massachusetts Law (for an Employer in General)

Under MGL ch. 149, sec. 148B, all three elements of this test must exist in order for an individual to be classified other than as an employee.

Prong 1: Freedom from Control

Is the employee “free from [your] control and direction” — in the contract and in fact — while performing the service?

Example: You are an employer if person you hire does not do the job using her own approach, with little direction, and does not dictate her hours of work.

Prong 2: Service Outside the Usual Course of the Employer’s Business

Is the service provided “outside the usual course of [your] business”?

Prong 2 is not relevant as to whether one is an employer “if the worker is performing services that are part of an independent, separate, and distinct business from that of the employer.”  (Id.Advisory 2008/1)

Prong 3: Independent Trade, Occupation, Profession, or Business

Is the person you hired “customarily engaged in an independently established trade, occupation, profession or business of the same nature as that involved in the service performed”?

Note: Courts have considered whether the service is an independent trade because the worker can perform it for whoever wants it, or whether, on the other hand, the nature of the work compels the worker to depend on a single employer for the continuation of the service. Coverall v. Div. of Unemployment Assistance, 447 Mass. 852, 857-58 (2006)

This information was taken from the Attorney General advisory at http://www.mass.gov/ago/docs/workplace/independent-contractor-advisory.pdf

IMPORTANT: The Office of the Attorney General issued this Advisory regarding MGL ch. 149, sec. 148B, the Massachusetts Independent Contractor Law, or the Massachusetts Misclassification Law (the “Law”). This Advisory provides guidance as to the Attorney General’s understanding of and enforcement of the Law. It is not a formal opinion; it is intended to provide guidance only and does not create any rights or remedies.