Independent Contractor Test: Why the Answer Might be Different under Massachusetts Law than the IRS Guidelines
Massachusetts Independent Contractor Classification: Understanding IRS vs. State LawYour accountant may have advised you to classify certain workers as independent contractors, mainly for tax purposes. While the IRS might endorse this classification, it's essential to understand that Massachusetts law has its own criteria, which might not align. This disparity can create significant confusion for Massachusetts business owners.
It's vital to grasp that even if the IRS recognizes a worker as an independent contractor, you may still encounter legal issues under Massachusetts law. Definition of Contractor: The IRS VersionHistorically, the IRS employed a comprehensive "20 factor test" to determine a worker's status. Today, this test has been condensed into three primary categories: behavioral control, financial control, and the nature of the worker-employer relationship.
Definition of Contractor: How the IRS Differs from MassachusettsWhile both IRS and Massachusetts law consider similar factors, there are key distinctions:
Misclassification Under Massachusetts LawMeeting the IRS criteria ensures you won't face tax liability issues related to employees. You'll continue issuing 1099 forms and won't need to withhold federal taxes.
However, if you don't meet Massachusetts' three-part test, you could face employment law concerns. Contractors could seek damages in civil suits, including self-employment taxes and missed employee benefits. Moreover, you might undergo investigation by the Massachusetts Attorney General, which could result in fines, penalties, and damages. |
We're Here to Help.OR
|
Questions About the Independent Contractor Law?
Our Solutions Roadmap is a quick and easy way to share the details of what you are facing and receive preliminary feedback from a member of our team. Use the button below to get started- it is 100% confidential and 100% free.
Industry Norms vs. Legal Reality
In some industries, the use of independent contractors is widespread, despite potential misclassification. Publishing, design, consulting, and IT consulting firms often rely on freelancers. However, just because it's an industry norm doesn't mean it's legally valid.
Even with assurances from your accountant, your independent contractor classification may not withstand legal scrutiny. Consulting an employment lawyer is crucial to ensure compliance with Massachusetts law.
Don't leave your worker classification to chance. Understand the nuances of IRS vs. Massachusetts law to avoid legal entanglements and financial repercussions.
Even with assurances from your accountant, your independent contractor classification may not withstand legal scrutiny. Consulting an employment lawyer is crucial to ensure compliance with Massachusetts law.
Don't leave your worker classification to chance. Understand the nuances of IRS vs. Massachusetts law to avoid legal entanglements and financial repercussions.
Meet Our Employment Lawyers
Emily Smith-Lee is the owner and founder of slnlaw. She is a 1996 graduate of Boston College Law School. She was previously a partner at the Boston office of a large international firm, where she worked for thirteen years before starting the firm that became slnlaw in 2009. She has been recognized as Massachusetts Superlawyer each year since 2013, and in 2018 earned recognition as one of Massachusetts Lawyers Weekly's Lawyers of the Year. She has written a book on employment law: Rules of the Road, What You Need to Know About Employment Laws in Massachusetts, and helped thousands of clients on both the employee and employer side with severance and non compete review and negotiation, wage and hour, discrimination and retaliation disputes, and navigating the nuances of the Massachusetts Independent Contractor Law.
Rebecca Rogers: Rebecca is a 2006 graduate of Boston College Law School, and has worked with slnlaw since 2013. She previously worked as an intellectual property litigation attorney for Fish & Richardson in Boston, Massachusetts, and clerked for the Massachusetts Supreme Judicial Court. Rebecca has helped clients with independent contractor misclassification and wage and hour disputes, employment discrimination, harassment and retaliation claims, and review and negotiation of employment and independent contractor agreements.
Jenna Ordway: Jenna is a 2013 graduate of Quinnipiac Law School, and also earned an LLM in Taxation from Boston University in 2015. She has been affiliated with slnlaw since 2011, first as a law clerk and then as an attorney. Jenna has been recognized since 2019 as a "Rising Star" by Massachusetts Superlawyers. Jenna has helped clients with review and negotiation of employment and independent contractor agreements, employee misclassification and wage and hour disputes, and advice to small business owners about employment law and other business matters.
Elijah Bresley: Eli is a 2014 graduate of Seton Hall Law school, and has worked with slnlaw since 2020. He previously worked for a boutique employment law firm outside of Boston, and then for the Labor and Employment department of a large Boston firm. He also spent a year clerking for the judges of the Superior Court in Hartford, Connecticut. Eli has helped clients on the employee and employer side with all varieties of employment law issues, including independent contractor misclassification and wage and hour disputes, employment discrimination, harassment and retaliation claims, review and negotiation of employment and independent contractor agreements, and litigation in state and federal courts on employment related issues.
Sharleen Tinnin: Sharleen is a 2010 graduate of Northeastern University School of Law, and has been with slnlaw since 2023. Prior to joining slnlaw, she worked with King, Tilden, McEttrick & Brink, P.C. on complex civil litigation matters. She previously worked for the United States Department of Justice, and received an "Excellence in Justice" award in 2017. Sharleen has helped clients with independent contractor misclassification and wage and hour disputes, employment discrimination, harassment and retaliation claims, review and negotiation of employment and independent contractor agreements, and litigation in state and federal courts on employment related issues.
How We Can Help
At slnlaw, we specialize in employment law and worker classification issues. Our experienced team can provide legal guidance to ensure proper worker classification, minimizing the risk of misclassification disputes and penalties under Massachusetts law. You can use the button below to schedule a call back from a member of our team, or give us a call at 781-784-2322.
Emily Smith-Lee Rated by Super Lawyers loading ... |
Jenna Ordway
Rated by Super Lawyers loading ... |