--- name: "worker_classification_review" description: "Reviewing whether a worker should be an employee or an independent contractor: applying the controlling tests by jurisdiction, scoring control, integration, and profit factors, documenting the call, and flagging engagements that need counsel before they start. Use when classifying a new hire, auditing contractor rosters, converting a role, or checking a borderline engagement in the US or UK." --- # Worker Classification Review ## Purpose Run a standalone classification review that holds up if a tax agency, a wage agency, or the worker asks why the label was chosen. The review picks the test that controls for the purpose at hand, scores the actual working facts, and produces a written record. It does not give a global label. A worker can be an employee for tax withholding and a contractor for another purpose, or the reverse, because each statute uses its own test. This is general information for structuring a review. It is not legal advice. Section 5 lists the engagements where counsel must make the call before work starts. ## Workflow 1. Fix the question before scoring anything. Write down the worker, the hiring entity, the country and state or region, the start date, and the purpose: federal tax, wage and hour, unemployment insurance, workers compensation, labour organising rights, benefits, or UK tax. One engagement often needs two or three separate answers. If the purpose is missing, stop and get it. A score under the wrong test is worse than no score. 2. Collect facts about practice, not paperwork alone. Get the signed agreement if there is one, plus how the work actually runs: who sets hours and place, who can turn work down, who sets the rate, who provides tools, how pay is calculated, whether the worker serves other clients, and how the engagement can end. Agencies and courts look at actual practice over contract labels. If the contract says one thing and the manager does another, record both and score the practice. 3. Run the controlling test first. Use `references/jurisdiction-map.md` to pick it. - US federal tax: IRS common law test, three categories (behavioural control, financial control, relationship of the parties). - US wage and hour under the Fair Labor Standards Act: Department of Labor economic reality test. Check the current text of 29 CFR Part 795 on the day of the review, because the rule changed in 2024 and a replacement was proposed in February 2026. - US labour rights under the National Labor Relations Act: NLRB common law agency test from The Atlanta Opera (2023). - US state wage, unemployment, or workers compensation: the state test for that programme. In ABC states the ABC test for that programme controls, and it is stricter than the federal tests. - UK tax through an intermediary: IR35 off-payroll working rules. Decide who must make the determination before scoring. 4. Score every factor in writing. Use `references/factor-worksheets.md` for the factor lists and the evidence prompts under each factor. For each factor record the evidence, the source of that evidence (contract clause, interview, invoice, roster), and a call: leans employee, leans contractor, or neutral or unknown. Unknown is a real answer. Do not fill gaps with assumptions. Run the bundled scorer to total the sheets once the calls are entered: `python3 scripts/classification_score.py --input review.json --output review-score.json`. See `references/scoring-sheet.md` for the input format and a filled example. 5. Apply the hard gates before reading any total. Totals do not decide ABC or IR35 cases. - ABC test: the hiring entity must prove all three prongs. If any prong fails, the worker is an employee under that test. No points total can rescue a failed prong, and prong B fails most core-work engagements. - IR35: if there is no genuine right to send a substitute, or the client controls what, how, when, and where in the way it controls staff, the engagement is at high risk of an inside IR35 finding regardless of other factors. - Any test: if the worker does the same work, in the same team, on the same schedule as staff doing that job, treat that fact as heavy evidence and explain in the record why the outcome is not employee status if you still reach it. 6. Decide, or escalate. Reach one of three outcomes per purpose: employee, contractor, or counsel before start. Use the escalation triggers in step 7 of `references/factor-worksheets.md`. Borderline is an escalation trigger, not a tie break in favour of contractor status. Record the deciding factors in two or three sentences. A record that lists every factor and names none as deciding will not help in an audit. 7. Fix the engagement or fix the label. If the facts point to employee status and the business wants contractor status, the only honest routes are to change the actual working facts (real rate negotiation, real right to refuse and to substitute, real other clients, project pay with real loss risk) and re-run the review, or to hire the worker as an employee. Editing contract wording while keeping the same practice does not change the result and creates a paper trail that hurts. 8. File the record and set a re-review trigger. Save the worksheets, the scorer output, the agreement, and the decision note together. Re-run the review when hours, duties, pay method, exclusivity, duration, or the controlling manager changes, when the engagement passes 12 months, or when the governing rule changes. Classification drifts as engagements drift. ## Output Contract - Header: worker role (not a private name in shared copies), hiring entity, jurisdiction, purpose or purposes, review date, reviewer, and whether facts came from documents, interviews, or both. - Test selection note: which test controls for each purpose and why, with the current rule version checked and the date it was checked. - Factor worksheets: one row per factor with evidence, source, and call. Unknowns listed, not hidden. - Hard gate results: ABC prongs A, B, and C marked pass or fail separately where the ABC test applies. IR35 control, substitution, and mutuality marked separately where IR35 applies. - Scorer summary: counts per test from `scripts/classification_score.py`, presented as a summary aid only, with the hard gate results placed above it. - Decision per purpose: employee, contractor, or counsel before start, plus the two or three deciding factors. - Changes required: if contractor status depends on facts changing, list each change, its owner, and the date it must be live before work starts. - Re-review trigger and filing location. ## Operating Rules - Never decide from the contract label. A document calling someone a contractor, or the worker asking for contractor status, or the worker having a company or a tax number, does not decide any of the main tests. - Never average across tests. Do not blend an IRS score, a wage score, and a state score into one verdict. Report each purpose separately, even when they agree. - Never use a points total to override a conjunctive test. The ABC test needs all three prongs. IR35 turns first on control, personal service, and mutuality. Totals are for spotting patterns inside balancing tests only. - Count the right to control, not only control exercised. Under the IRS test and the NLRB test, a reserved right to direct how work is done counts even if the manager never uses it. - Treat long, exclusive, open ended engagements as employee leaning until proven otherwise. Permanence and exclusivity appear in every balancing test for a reason. Short project work for several clients is the fact pattern that supports contractor status, not the other way round. - Keep the style plain in the written record. Write what the worker actually does, who decides each point, and what money actually moves. Avoid copying legal phrases into the record without the facts under them. - Do not quantify penalties, back tax, or liability unless you have pulled the figure from the agency that would impose it for that year and programme. Consequences vary too much by agency and facts for a general figure to be safe. - If the worker has already started and the review finds employee status, escalate the same day. Back pay, withholding, and benefit questions compound with each pay cycle, and the fix is different once money has been paid as contractor pay.