The Massachusetts Three Part Test for Independent Contractors

Mastering the Massachusetts Independent Contractor Test: Your Comprehensive Guide

Massachusetts utilizes a comprehensive three-part test, often referred to as the ABC test, to differentiate between employees and independent contractors. It's crucial to grasp that this differs from the IRS test, being notably stricter. Misclassification can lead to significant damages, making it imperative to navigate these rules accurately and separate them from prevailing misconceptions.

Decoding the Three-Part Test: What It Entails

The three-part test, or ABC test, mandates the fulfillment of the following criteria:

Absence of control and direction in your work.
The business of the employer is different from the services you provide
You are customarily engaged in an independent trade or business.

It's crucial to note that satisfying all three of these criteria is imperative; failure to do so will result in the individual being legally classified as an employee.

A. Absence of Control Over the Independent Contractor

Even in the realm of genuine independent contracting, some degree of direction is inevitable. For instance, if you hire a plumber to fix your bathroom, providing guidance on the task's specifics is reasonable. However, true independent contractor status hinges on the absence of substantial control and direction by the hiring party. The worker should exercise their judgment and expertise to accomplish the task independently.

In contrast, employees are given precise instructions regarding their duties, along with rules concerning work hours, dress codes, or procedural protocols. Their performance is scrutinized against these instructions, indicating a lack of true independence.

B. 1099 Employee and the Business of the Employer

Massachusetts law requires that the contracted work lies outside the employer's core business. This aspect of the test has posed challenges for businesses utilizing independent contractors.

In practice, many contractor services intersect with their employer's core operations. Even if the other two criteria are met, if the worker's tasks align with the business's usual operations, classifying them as an independent contractor may breach the law.

For example, hiring someone for legal research, even temporarily, involves a core aspect of a law firm's business. Thus, such an individual may not qualify as an independent contractor, irrespective of their working hours or the assignment's brevity.

Ancillary support services (like IT consultants, payroll, or accounting) can typically be contracted on the condition that they meet the other two test criteria, demonstrating genuine independence and offering similar services to others. However, if your core business revolves around IT consulting, payroll, or accounting, scrutinize this test section carefully.

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C. Customarily Engaged in Independent Business

In addition to the initial two criteria, a genuine independent contractor must be involved in an established trade, occupation, or business, offering services to multiple entities.
This element is frequently misconstrued. It implies that contractors shouldn't exclusively serve one business and should remain available for work in a field similar to the services they provide to you.
Notably, forming an LLC or corporation doesn't inherently affect this test. Having a corporation but working solely for one employer may still fail to meet this criterion. Conversely, a worker lacking corporate status but routinely providing services to various businesses may meet this requirement.

Misclassification: Limited Exceptions

Despite the strict application of the three-part test, certain exceptions exist:

Drivers of Large Trucks in Interstate Commerce: The federal Motor Carrier Act preempts the second prong of the Independent Contractor Law for truck drivers exceeding 10,000 pounds involved in interstate commerce. However, the other two parts of the test still apply.
Licensed Real Estate Agents: Massachusetts courts have exempted licensed real estate agents from the Independent Contractor Law due to licensing statutes, making the common practice of employing them as independent contractors legally sound.

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

Navigating Massachusetts' independent contractor rules is essential for legal compliance. Understanding these intricacies is critical to avoid misclassification pitfalls and the potential consequences that may follow. We're here to help. 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.

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