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Certain Workers are Employees if the Common-Law Test is Not Met

Excerpted from "Social Security Handbook". See the up-to-date, official Social Security Handbook at ssa.gov.

826. Certain Workers are Employees if the Common-Law Test is Not Met

826.1 Are you considered an employee even if you do not meet the common law test?

If you work in one of the four occupational groups set out in §§827-830, you are an employee for Social Security purposes even if you do not meet the common-law test as long as:

  1. Your work contract expects that you will do mostly all of the work;

  2. You have no substantial investment in the facilities used to do your work (except for tools, equipment, transportation, or clothing employees you usually provide); and

  3. You have an on-going work relationship with the person for whom you work.

826.2 Does it matter if the work contract is oral versus written?

No. The contract of service may be oral or written. The important issue in the contract is that you have no authority to delegate a substantial amount of your work to another person. However, there are cases where you might occasionally hire a substitute or assistant and still be an employee under this test. What is important is that it is intended that you perform the essential services of your job.

826.3 What does it mean to have a substantial investment in facilities?

A substantial investment in facilities would be the investment of items such as office furniture, fixtures, premises, and machinery. A salesperson who maintains a home office may not have substantial investment; however, a salesperson with an office elsewhere would be considered to have a substantial investment in facilities.

826.4 Are items workers have or use to do their jobs considered an investment in facilities?

Your investment in your education, training, tools, instruments, clothes, or vehicle (used to go to and from work) are not considered a substantial investment in facilities.

826.5 What is meant by an "on-going work relationship"?

You have an on-going work relationship if you work regularly and frequently work for your employer. Regular part-time work and regular seasonal work are considered on-going. On the other hand, a single job transaction, even if it covers a considerable period of time, is usually not part of an on-going relationship.

Last Revised: March, 2001


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