As a student at a school,
college or university, if the student is enrolled and regularly attending
classes at that school, college or university;
By the spouse of a student,
if the spouse is advised that the employment is part of a program to provide
financial assistance to the student by the school, college, or university,
and that the employment will not be covered by any program or unemployment
insurance; and
By an individual enrolled
at a nonprofit or public educational institution, which normally maintains a
regular faculty and curriculum; and the institution normally has a regularly
organized body of students in attendance at the place where its educational
activities are carried on. The individual is enrolled as a student in a full
time program taken for credit at the institution, which combines academic
instruction with work experience. The service performed is an integral
part of the program and the institution has so certified to the employer.
Exempt Labor for Nonprofit Organizations.
Service performed by an individual in any quarter in the employ of a nonprofit
organization exempt under Section 501(c)(3) of the Internal Revenue Code if
the remuneration is less than $50.00.
Governmental Workers.
Service performed by:
An elected official, a member of a legislative body or
a member of the judiciary of the state or its political subdivision, a
member of the State National Guard or Air National Guard;
Emergency temporary employees serving on a temporary
basis in case of fire, storm, earthquake, flood or similar emergency. (This
exemption covers only emergency natural catastrophes. Work of a long term
nature for an employer involved in flood control, snow removal, fire
fighting, etc., or work of a temporary nature in the usual course of the
employer is not exempt.);
Someone in an advisory or policy making position whose
performance ordinarily is not required more than eight hours per week;
An individual receiving rehabilitation or remunerative
work in a facility conducted for the purpose of carrying out a program of
rehabilitation for individuals whose earning capacity is impaired by age,
physical or mental deficiency, injury, or providing remunerative work for
individuals who, because of their impaired physical or mental capacity,
cannot be readily absorbed into the competitive labor marked;
An individual receiving work relief or work training as
part of an unemployment work relief or work training program, assisted or
financed in whole or in part by any federal, state or political subdivision;
or
An inmate of a custodial or penal institution.
Independent Contractors.
Individuals may be excluded from coverage if:
The individual is customarily engaged in an
independently established trade, occupation, profession, or business of the
same nature as that involved in the contract of hire for services; and
The individual has been and will continue to be free
from control or direction over the means of performance of those services,
both under the individual’s contract of hire and in fact.
The following factors are considered to determine if an
individual is customarily engaged in an independently established trade,
occupation, profession or business:
Separate Place of Business.
The individual has his own place of business separate from that of the
employer.
Tools and Equipment. The
individual has a substantial investment in the tools, equipment, or facilities
customarily required to perform the services. "Tools of the trade"
such as those used by carpenters, mechanics, etc., do not necessarily
demonstrate independence.
Other Clients. The
individual performs services of the same nature for other customers or clients
and is not required to work full time for the employer.
Profit or Loss. The
individual is in a position to realize a profit or loss through his
independently established business activity.
Advertising. The individual
advertises his service in telephone directories, newspapers, magazines, or by
other methods clearly demonstrating that he holds himself out to the public to
perform the services.
License.
The individual has obtained any required and customary business, trade or
professional licenses.
Business Tax Forms. The
individual files self-employment and other business tax forms required by the
Internal Revenue Service and other tax agencies.
The following factors will be considered to determine if an
individual’s services are subject to the employer’s right of control and
direction:
Instructions. A worker who
is required to comply with another person’s instructions about when, where
and how he is to work is ordinarily an employee. This factor is present if the
employer for whom the service is performed has the right to require compliance
with instructions.
Training. Training an
individual by requiring an experienced person to work with the individual, by
corresponding with the individual, by requiring the individual to attend
meetings, or by using other methods, indicates that the employer for whom the
services are performed expects the services to be performed in a particular
method or manner.
Pace or Sequence.
A requirement that the service must be provided at a pace or ordered sequence
imposed by the employer indicates control and direction.
Work on Employer’s Premises.
A requirement that the service be performed on the employer’s premises
generally indicates that the employer for whom the service is performed has
retained a right to supervise and oversee the manner in which the service is
performed, especially if the service could by performed elsewhere.
Personal Service. If the
services must be performed personally, presumably the employer for whom the
services are performed is interested in the method used to accomplish the work
as well as in the results.
Continuing Relationship. A
continuing relationship between the individual and the employer indicates that
an employer/employee relationship exists. A continuing relationship may exist
where work is performed at frequent recurring, although irregular intervals.
Set Hours of Work. The
establishment of set hours of work by the employer indicates control.
Method of Payment.
Payment by the hour, week or month generally points to an employer/employee
relationship, provided that this method of payment is not just a convenient
way of paying a lump sum agreed upon as the cost of a job.
These factors are intended only as guides for determining
whether an individual is an employee or independent contractor. The degree of
importance of each factor varies depending on the occupation and the factual
context in which the services are performed.
Individuals classified as "independent contractor"
either by themselves, by the principal for whom they work, or by contract are
not excluded from being considered in employment simply because of the
classification. The Act does not contain the term "independent
contractor" and an exclusion for such does not exist. In order for the
services performed by an individual to be excluded from coverage under the Act,
they must satisfy both tests mentioned above.
If you have classified or contemplate classifying any of your
workers as "self-employed" or "independent contractor,"
please notify the Department so that a proper determination of status can be
made. By doing this, you may avoid additional, unexpected liabilities, interest
and penalties.