August 01, 2008
Question of the Week: Does Massachusetts Have Laws Regarding Employees and Independent Contractors?
Filed under: News
Vision Payroll

This week’s question comes from Louisa, an HR manager: We have individuals who perform services for us. Does Massachusetts have any laws to determine if these individuals are our employees or independent contractors? Answer: In Massachusetts General Laws (MGL), c. 149, §148B three tests are enumerated and unless the individual meets all three tests, an employer-employee relationship will result. The tests are (1) the individual is free from control and direction in connection with the performance of the service, both under his contract for the performance of service and in fact; and (2) the service is performed outside the usual course of the business of the employer; and, (3) the individual is customarily engaged in an independently established trade, occupation, profession or business of the same nature as that involved in the service performed. The law also states that not withholding federal or state income taxes or not paying unemployment insurance or workers compensation insurance premiums for this individual has no impact on the determination. Furthermore, even if the individual has a workers’ compensation insurance policy, it is not relevant for making the determination. To further complicate matters, the Massachusetts Department of Revenue (DOR) issued TIR 05-11, that states the DOR will follow the rules of MGL c. 62B for withholding purposes. Significant penalties exist for misclassifying workers, so be sure to consult your attorney if you have further questions.


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