Can I treat this worker as an independent contractor?

Employer, SME

Any business paying a worker for services.

Only if the worker is not an employee under the IRS common-law test and the FLSA economic reality test.

Classify each worker under both tests, withhold and pay employment taxes for employees, and report contractor payments.

high (statutory_damages)

1. Apply the IRS common-law control test
2. Apply the FLSA economic reality test
3. Report contractor payments on Form 1099-NEC
4. Reclassify and correct payroll where the tests point to employment

Form 1099-NEC to the recipient and the IRS by January 31 of the following year.

• 26 U.S.C. 3509
• 26 U.S.C. 6071(c)
• 29 U.S.C. 203(e)(1)

sha256 8b8702bcb0da719c2c768ad72ae529f8f69e2a5210d74ae2684250bf541384d0 · read 2026-10-15 · Source: NovaCopilot

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