In the past, a list of 20 factors compiled by the IRS has been used in court decisions to determine worker status. The list, sometimes called the 20-Factor Test, will still be used as an analytical tool although some of the factors are no longer as relevant as they once were. The new guidelines direct agents to focus on the overall situation rather than to emphasize one or two of the 20 factors. The determination of whether a worker is an employee or an independent contractor is based on common law rules. An employer generally has the right to control how an employee performs the service.
Independent contractors determine for themselves how the work is to be performed.
Common law rules look at the relationship of the worker and the business, taking into consideration all evidence of control and independence. These categories of evidence are used in connection with IRS audits concerning worker status. Not all facts need to be present in any given situation, and no single fact is controlling. An employee is generally subject to the business' instructions about when, where, and how to work. Even if no instructions are given, sufficient behavioral control may exist if the employer has the right to control how the work results are achieved.