Worker classification by state: employee vs contractor tests
There is no single national test for employee versus contractor. 26 US jurisdictions use an ABC test for at least some purposes, 6 of them broadly; most others use a common-law or economic-realities test.
Whether a worker is an employee or an independent contractor decides who owes minimum wage, overtime, payroll tax, unemployment insurance and benefits, and misclassification is one of the most expensive mistakes an employer can make. There is no single national test. Some states apply a strict ABC test, under which a worker is an employee unless the employer proves all three of: the worker is free from control, does work outside the employer's usual business, and is independently established. California's AB5 is the best-known example. Other states apply the ABC test only for unemployment insurance or specific statutes, and many still use a common-law control test or an economic-realities test. This page is descriptive, not advice: it summarises the test each state uses.
The big picture
Classification is set state by state. As of 1 July 2026, 26 of the 51 US jurisdictions apply an ABC test for at least some purposes (6 broadly, like California's AB5); the rest use a common-law control or economic-realities test. As of mid-2026 the US Department of Labor is not enforcing its 2024 independent-contractor rule (an economic-reality, six-factor test that took effect in March 2024). On 1 May 2025 the DOL announced non-enforcement and reverted to its earlier economic-reality guidance, and on 27 February 2026 it proposed a rule to rescind and replace the 2024 version, though that rule technically remains on the books for private FLSA lawsuits until formally rescinded. State law governs independently for state wage-and-hour and unemployment-insurance purposes.
Position as at 1 July 2026. Source.
What is the ABC test?
The ABC test presumes a worker is an employee unless the business proves all three: (A) the worker is free from the company's control, (B) the work is outside the company's usual business, and (C) the worker is independently established in that trade. It is the strictest common test, and part B is the hardest to meet. California's AB5 made it the default for most purposes.
Which states use the ABC test?
California, Massachusetts and New Jersey apply a strict ABC test broadly. Many other states apply an ABC test only for unemployment insurance or specific statutes, while the rest use a common-law control test or an economic-realities test. Each state's test and its scope are in the table.
Is there a federal test for contractor status?
Federal wage law uses an economic-realities test, and the US Department of Labor changed its rule in 2024, then revisited it under the new administration. State law still governs for state wage and unemployment purposes, so a worker can be a contractor federally but an employee under a state's ABC test. This page describes each state's test and is not legal advice.
How does this work if you hire through an EOR?
When Teamed is your Employer of Record, worker classification compliance for your US team sits with us: we apply the correct state's rules in every state you hire in, so you get one compliant relationship instead of 50 rulebooks to track. You stay the day-to-day manager.
Worker classification by state
51 jurisdictions
| Source | |||||
|---|---|---|---|---|---|
| California | ABC test | ABC test (Dynamex/AB5) | Most wage and hour plus UI (statutory exemptions revert to Borello) | Cal. Labor Code 2775 et seq. | source |
| Illinois | ABC test | ABC test for UI; strict ABC for construction | UI, plus construction under the Employee Classification Act | 820 ILCS 405/212; 820 ILCS 185 | source |
| Massachusetts | ABC test | ABC test (strict three-prong) | Most wage and hour plus UI | Mass. Gen. Laws ch. 149, 148B | source |
| New Jersey | ABC test | ABC test | UI, wage and hour, and wage payment | N.J.S.A. 43:21-19(i)(6) | source |
| Oregon | ABC test | Modified ABC (free from control and independently established, 3-of-5) | Most wage and hour, UI and workers comp | ORS 670.600 | source |
| Vermont | ABC test | ABC test | Unemployment insurance and wage and hour | 21 V.S.A. 1301(6) | source |
| Alaska | ABC (limited) | ABC test (unemployment insurance only) | Unemployment insurance | Alaska Stat. AS 23.20.525(a)(8) | source |
| Colorado | ABC (limited) | Modified two-part test (free from control and independent trade), no usual-course prong | Unemployment insurance | Colo. Rev. Stat. 8-70-115 | source |
| Connecticut | ABC (limited) | ABC test (unemployment insurance) | Unemployment insurance | Conn. Gen. Stat. 31-222(a)(1)(B)(ii) | source |
| Delaware | ABC (limited) | ABC test (unemployment insurance) | Unemployment insurance | 19 Del. C. 3302(14)(K) | source |
| District of Columbia | ABC (limited) | Common-law control test for UI; ABC test limited to construction | UI (common law); construction (ABC, Workplace Fraud Act) | D.C. Code 51-101; 32-1331.04 | source |
| Georgia | ABC (limited) | Modified two-part ABC test for UI (HB 389, 2022) | Unemployment insurance | O.C.G.A. 34-8-35(f) | source |
| Hawaii | ABC (limited) | ABC test for UI with a 20-factor overlay | Unemployment insurance | Haw. Rev. Stat. Ch. 383 (383-1); HAR 12-5-2 | source |
| Indiana | ABC (limited) | ABC test (three prongs) for UI | Unemployment insurance | Ind. Code 22-4-8 | source |
| Louisiana | ABC (limited) | ABC test (three-fold test) for UI | Unemployment insurance | La. R.S. 23:1472(12)(E) | source |
| Maine | ABC (limited) | ABC test (all three prongs) for UI | Unemployment insurance | 26 M.R.S. 1043(11)(E) | source |
| Maryland | ABC (limited) | ABC test for UI; Workplace Fraud Act for construction and landscaping | UI, plus construction and landscaping | Md. Code, Lab. and Empl. 8-205; 3-901 et seq. | source |
| Nebraska | ABC (limited) | ABC test for UI (does not apply to contract-of-hire employment) | Unemployment insurance | Neb. Rev. Stat. 48-604(5) | source |
| Nevada | ABC (limited) | ABC test for UI; separate conclusive-presumption test for wage and hour | UI; wage and hour under NRS 608.0155 | Nev. Rev. Stat. 612.085; 608.0155 | source |
| New Hampshire | ABC (limited) | ABC-style test (unemployment compensation) | Unemployment compensation | N.H. Rev. Stat. 282-A:9 | source |
| New Mexico | ABC (limited) | ABC test (unemployment compensation) | Unemployment compensation | NMSA 1978, 51-1-42(F)(5) | source |
| Pennsylvania | ABC (limited) | Two-part UI test; ABC for construction (Act 72) | UI; construction; common law elsewhere | 43 P.S. 753(l)(2)(B); Act 72, 43 P.S. 933.1 et seq. | source |
| Rhode Island | ABC (limited) | ABC test (unemployment insurance) | Unemployment insurance | R.I. Gen. Laws 28-42-8 | source |
| South Dakota | ABC (limited) | Two-part statutory test (free from control and independently established) | UI (Reemployment Assistance); common law elsewhere | SDCL 61-1-11 | source |
| Utah | ABC (limited) | Two-part AB test (independently established and free from control) | Unemployment insurance only | Utah Code 35A-4-204(3) | source |
| Washington | ABC (limited) | ABC-style three-part or six-part alternative test (UI) | Unemployment insurance only | RCW 50.04.140 | source |
| Alabama | Common law | Common law, IRS 20-factor control test | Unemployment insurance and state tax | Ala. Code Title 25 (Unemployment Compensation); HB 408 (2021) | source |
| Arizona | Common law | Common law right-to-control test | Most wage and hour, workers comp and UI | Ariz. Rev. Stat. 23-1601 (declaration of independent business status); common law | source |
| Arkansas | Common law | IRS 20-factor common law test (not the ABC test) | Unemployment insurance | Ark. Code 11-10-210; Empower Independent Contractors Act of 2019 | source |
| Florida | Common law | Common law right-to-control test (10 factors) | Reemployment assistance and most wage matters | Ch. 443, Fla. Stat. | source |
| Idaho | Common law | Right-to-control test (common law, four-factor) | Unemployment insurance and general classification | Idaho Code Title 72, Ch. 13 | source |
| Iowa | Common law | Common law right-of-control test (IRS-style factors) | Unemployment insurance and general classification | Iowa Code Ch. 96; IAC 871-21.1 | source |
| Kansas | Common law | Common law right-to-control test with a 20-factor overlay | Unemployment insurance | K.S.A. 44-703(i) | source |
| Kentucky | Common law | Common law, economic-realities (six-factor) test | Unemployment insurance and general classification | KRS Ch. 341 | source |
| Michigan | Common law | Economic-reality test; IRS 20-factor for UI | Most wage matters and UI | Mich. Comp. Laws 421.42; IRS Rev. Rul. 87-41 | source |
| Minnesota | Common law | Common law five-factor test for UI; a separate test governs construction | Most wage matters and UI | Minn. Stat. 268.035; 181.723 (construction) | source |
| Mississippi | Common law | Common law right-to-control test | Unemployment insurance and wage matters | Miss. Code 71-5-11 | source |
| Missouri | Common law | IRS 20-factor, right-to-control test | Unemployment insurance | Mo. Rev. Stat. 288.034 | source |
| Montana | Common law | AB-style test via an independent-contractor exemption certificate (ICEC) | UI, wage and hour and workers comp via ICEC | Mont. Code Ann. 39-71-417; 39-51-204 | source |
| New York | Common law | Common law (supervision, direction and control) | Most wage and hour plus UI; ABC only for construction | N.Y. Labor Law 511-512; 861-c (construction) | source |
| North Carolina | Common law | Common law right-to-control test | Most wage and hour plus UI | N.C. Gen. Stat. 96-1 | source |
| North Dakota | Common law | Common law, IRS 20-factor test | Most wage and hour plus UI | N.D. Cent. Code 52-01-01; common law | source |
| Ohio | Common law | Common law, IRS 20-factor (direction and control) | Most wage and hour plus UI | Ohio Rev. Code 4141.01(B); OAC 4141-3-05 | source |
| Oklahoma | Common law | IRS 20-factor within a hybrid statutory test | UI (Employment Security Act); common law elsewhere | 40 O.S. 1-210; OAC 240:10-1-7 | source |
| South Carolina | Common law | Common law right-to-control test | Most wage and hour plus UI | S.C. Code 41-27-230(1)(b) | source |
| Tennessee | Common law | IRS 20-factor test (Rev. Ruling 87-41) | Wage and hour, OSHA and UI | Tenn. Code Ann. 50-7-207; HB 539 (2019) | source |
| Texas | Common law | Common law direction-and-control plus IRS 20-factor test | UI (TWC applies common law across wage matters) | Tex. Labor Code 201.041 | source |
| Virginia | Common law | IRS guidelines, common-law test with a presumption of employment | Tax, labor, UI and workers comp | Va. Code 58.1-1900 et seq. | source |
| West Virginia | Common law | Statutory safe-harbor plus IRS Rev. Rul. 87-41 common-law test | UI, workers comp and wage payment | W. Va. Code 21-5I-4; 21A-1A-16 | source |
| Wisconsin | Common law | Multi-part test: two-part control plus six-of-nine conditions for UI; economic-reality for wage | UI (108.02); wage and hour separate | Wis. Stat. 108.02(12)(bm) | source |
| Wyoming | Common law | Three-part statutory control test | Unemployment insurance | Wyo. Stat. 27-3-104(b) | source |
Frequently asked questions
What is the penalty for misclassifying a worker?
Misclassification can mean back pay for minimum wage and overtime, unpaid payroll and unemployment taxes, benefits, and state penalties. Because tests differ by state, a worker can be compliant in one state and misclassified in another.
Does the federal DOL rule override state tests?
No. The federal economic-realities test governs federal wage claims, but each state applies its own test for state wage and unemployment purposes. The stricter test usually controls in practice.
Can Teamed handle this across multiple states?
Yes. As the legal employer, Teamed applies each state's worker classification rules for your US team, so you hire across the country without setting up payroll or reading the statute in every state. Teamed's HR and legal experts keep it compliant as the law changes.
US employment law is set state by state, and it keeps moving. When Teamed is your legal employer, this is our job in every state: compliant offers, postings and policies that meet each state’s rules, so you can hire across the US without setting up 50 payrolls or reading 50 statutes.
