The IRS worker control test sorts the facts about control into three categories, according to Internal Revenue Service. The IRS page says, "The facts that provide this evidence fall into three categories – behavioral control, financial control, and relationship of the parties." You can use those groups as a checklist, because each one is a set of facts to record rather than a yes or no answer.
Key takeaways
- record the facts under each IRS category before you add a worker to the schedule.
- keep worker status notes in the same file as pay and hours records, with each fact labeled by category.
- check New York and California wording separately, since each state publisher's wording covers its own state.
- use the IRS filing route only when you need a decision on a specific worker.
Why worker status matters when you approve hours
Adding someone to the schedule and approving their hours are different steps, but both put that person's work on your records. For the approval rules themselves, see timesheet approval rules. The status question matters at the moment you decide who goes on the schedule and whose hours you approve. Checking facts at that point is simpler than reconstructing them later from a finished timesheet.
If you set shifts every day, the facts feel obvious and can slip past a review, so write them down while they are visible. You can record how the person was scheduled, what instructions they received, and how they are paid. The sections below take each IRS category in turn, because the IRS page, according to Internal Revenue Service, organizes its evidence that way. Your review should stay separate from any dispute or discipline, because the categories organize facts rather than rule on a worker's classification.
Review each person before their first approved timesheet, and update the review when their work changes. A good record names the facts, the date, and the person who checked them, so the next review starts from the same notes.
Working through each category
Work through each category with the same worker in front of you, and write the facts beside that category rather than in a general note. A general note can mix schedule facts with pay facts, which makes the review harder to check later. You can start with the category that matches your open question, then complete the other categories before you decide anything. You may find gaps, and you can write them down as gaps rather than filling them with a guess about the worker.
If an open question remains after the review, you can bring it to the IRS through the filing route covered in the FAQ below, or to the state agency that publishes the rule you are checking.
Behavioral control: who directs the work
Behavioral control
The IRS page, according to Internal Revenue Service, says this category covers facts about whether the business can direct what work gets done and how it gets done, through instructions, training, or other means. Your schedule is a practical place to check this category, because it records who sets start times, who picks shifts, and who changes an assigned shift. For shift changes, see schedule change approval.
Record any written procedure you hand over, and keep a copy with the date you gave it.
Note whether the person can refuse a shift, change how a task gets done, or set their own hours. Write each answer beside this category in the same place so the reviewer can see it.
Your notes should describe what the person does, such as a required start time or a checklist, rather than what you hope they will do.
Think about how direction reaches the person in practice. If you post a shift and the person must ask you before starting a task, write that down as direction from the business. If the person reads a procedure you supplied and completes the work without a call to you, write that down as well. Each note should say who holds the right to direct the work.
Keep a short log for each worker during the first weeks on the schedule. Record each instruction you gave, the date, and whether the worker followed it. A log like this gives the reviewer something specific to check.
Financial control: who directs the business side
Financial control
The IRS page, according to Internal Revenue Service, says this category covers facts about whether the business can direct the financial and business aspects of the worker's job. The questions below are editorial prompts, not IRS wording.
Start with the pay record you already keep for the person. Look at whether your business sets the rate or pay method, who supplies tools and equipment, whether expenses are reimbursed, whether the person offers services to other customers, and whether the person can take on work elsewhere during the same hours. Each answer is a fact to record, and a blank answer is a gap to note rather than a value to guess.
Write the answers next to the pay record, so the approval step and the category review draw on the same facts. For deduction checks, see wage deduction checks before approval.
When you approve hours, compare the timesheet with the financial notes. If you set the hours and the person is paid through your normal process, the notes should show that. If the person bills their own costs or uses a business name of their own, the notes should show those facts as well. Keep both sets of notes together so the reviewer sees the full picture.
Update the note whenever the rate, the equipment, or the pay method changes. A dated history helps the reviewer see which terms applied to each approved timesheet.
Relationship of the parties
The IRS page, according to Internal Revenue Service, says this category covers facts that show the type of relationship the parties had. Your written agreement, if one exists, is a practical place to start, including its terms on length, duties, and how the person is described.
Note whether the work is a regular part of your business, such as a role that appears on the schedule each week. Record whether the person receives benefits from your business and list each benefit.
Compare the written terms with how the work actually runs, and mark which terms match what happens on the schedule. A term that says one thing while the schedule shows another is a gap to record rather than a conclusion to draw.
Next, look at how the relationship has run over time. Note how long the person has worked with you, whether the role was created for them, and whether it continues from one period to the next. These notes describe the working relationship itself, so keep them in this section and out of the pay record.
Benefits and the way the role is described on your records are part of this review too. Write the benefit list next to the agreement, and keep the description you use on schedules and timesheets in the same file. If those descriptions differ, record both and note the difference for the reviewer.
Record the date of any written agreement and the date of each later change, so the review shows which terms applied to which approvals. Keep the agreement, the schedule entries, and the benefit list in one dated folder for this worker, so the reviewer has one place to compare the relationship facts against each approved timesheet.
How New York and California frame the same question
New York's page, according to New York State Department of Labor, lists supervision, direction, and control among its criteria. Your review should record the supervision, direction, and control facts for each worker.
The same page says, according to New York State Department of Labor, "If an entity meets all of the 12 criteria, it will not be considered an employee of the contractor but will instead be a separate business that is itself subject to the new law regarding its own employees." That sentence is New York wording, so keep it inside your New York notes.
The California page, according to California Department of Industrial Relations, says: "For all other Labor Code provisions not relating to IWC wage orders: The ABC test applied beginning January 1, 2020 (unless an exemption from the test applies for certain occupations)." Your review can check whether an exemption for certain occupations applies to the role, and record the answer.
The same California page, according to California Department of Industrial Relations, gives a separate start date for workers' compensation insurance. You can keep that date in its own California note, apart from the general date.
For further questions, the New York page, according to New York State Department of Labor, says: "If you have any other questions call the Liability and Determination Section at 518-457-2635." You can note that section in your New York file, so the contact stays with the criteria.
Write the New York facts as the page states them, quoting the wording you used and noting the page address beside it. The same care applies to California, so a later reviewer can compare each note against its source.
What to keep on file
You can keep a dated note for each worker that lists the facts under each category, so the note matches the schedule and time approvals.
The IRS points readers to more guidance, according to Internal Revenue Service, in these words: "For more information, refer to Publication 15-A, Employer's Supplemental Tax Guide, Publication 1779, Independent Contractor or Employee PDF and Independent contractor (self-employed) or employee?" Your file can list those publication names, so the reference is easy to find.
If you need a status decision on a specific worker, you can keep the facts you would give the IRS organized in your file, with dates.
Set a review date for each worker, such as the date their role or hours change. Write the review date at the top of the note, and list what changed since the last review beneath it.
Store the notes where the person who sets the schedule and the person who approves timesheets can both reach them. A shared file keeps the category facts beside the approved hours they describe.
The table below lists quoted wording from each source.
| Publisher | Source page | Quoted wording |
|---|---|---|
| Internal Revenue Service | Independent contractor or employee topic | "Behavioral control covers facts that show if the business has a right to direct and control what work is accomplished and how the work is done, through instructions, training, or other means." |
| New York State Department of Labor | Independent contractors page | "These include how much supervision, direction, and control you have over the services." |
| California Department of Industrial Relations | Independent contractors FAQ | "For Workers’ Compensation Insurance: The ABC test applied beginning July 1, 2020." |
You can check each quoted line against its source page before copying it into a note.
Illustrative example: one worker's notes
A shift lead reviews one worker before the first approved timesheet. Under behavioral control, the lead records that the worker starts at a set time and follows a checklist of 5 steps. Under financial control, the lead records that the business sets the hourly rate and supplies the tools. Under relationship of the parties, the lead records a written agreement dated before the first shift and a role that repeats each week. The lead dates the note, names the reviewer, and files it with the timesheets approved so far.
Related guides
Next step on your schedule
Your next step is to list each non-employee worker on your schedule and note the facts under each IRS category.
FAQ: worker status questions
What are the IRS categories?
The IRS names behavioral control, financial control, and relationship of the parties as its categories, according to Internal Revenue Service. Behavioral control is about whether a business can direct the work and how it gets done, according to Internal Revenue Service. Financial control is about the financial and business aspects of the job, and relationship of the parties is about the type of relationship, according to Internal Revenue Service.
How do I ask the IRS to decide a worker's status?
File Form SS-8, Determination of Worker Status for Purposes of Federal Employment Taxes and Income Tax Withholding, to ask the IRS whether a specific individual is an independent contractor or an employee, according to Internal Revenue Service. Use it for one worker's question, not for a general review of your schedule.
Does New York use the same factors?
New York's page names supervision, direction, and control among its criteria, according to New York State Department of Labor. Do not assume those criteria match the federal categories; check the state page before relying on any rule.
When did the California ABC test start for workers' compensation?
The ABC test applied for workers’ compensation insurance beginning July 1, 2020, according to California Department of Industrial Relations. You can use that date for California records, and you should not apply it to other states. Check the same California page for the exemption for certain occupations before you rely on the date.
Does one category settle worker status?
No. The IRS presents the categories as groups of facts, according to Internal Revenue Service, so review each group rather than treat one group as the answer. This guide does not decide the question for any named worker.
What should I record for each worker?
Record a list of facts under each category, not a conclusion about status. Put the notes beside the schedule entry and the approved hours they relate to, with the date of review and the reviewer's name, so the record shows when the facts were checked.