Skip to main content
All CollectionsEmployment: Legal UpdatesHiring & Separation
Get Started with the Employee Contractor Analyzer
Get Started with the Employee Contractor Analyzer
Emily Caldwell avatar
Written by Emily Caldwell
Updated over a week ago

Our Employee Contractor Analyzer helps you quickly determine whether a worker should be classified as an employee or an independent contractor under federal law.

This tool guides you through a series of simple questions about the nature of the work and provides a clear, customized classification report.

Why do I need this?

Misclassifying workers can lead to costly legal issues, including fines and penalties. The Employee Contractor Analyzer simplifies the process by evaluating each worker individually, ensuring compliance with federal law. This tool uses three key tests: the Economic Reality Test (FLSA), the Right to Control Test (IRS), and the Common Law Test (ERISA). By the end, you'll have a detailed classification report to ensure you’re on the right side of the law—without needing a law degree yourself.

How it works

Answer Questions: Start by answering a few straightforward questions about the worker's role, responsibilities, and relationship with your business. The tool focuses on critical factors like the nature of work, worker expenses, and how much control the worker has over their tasks. No legal expertise is required—just answer questions with easy multiple-choice options.

Review and Customize: Once you've completed the questionnaire, you'll receive a detailed classification report. The report is divided into three tables that summarize the worker’s status under the three main legal tests:

  1. Economic Reality Test (FLSA): Determines whether the worker is eligible for minimum wage and overtime pay.

  2. Right to Control Test (IRS): Determines whether you must withhold income tax from the worker's pay.

  3. Common Law Test (ERISA): Determines whether the worker is eligible for employee benefits.

Each table includes a brief explanation of the test, a general assessment of the worker's likely classification (employee or independent contractor), and specific answers you provided that led to that conclusion.

Download the Report: After reviewing the classification results, you can download the report for your records as a Microsoft Word file. This ensures that you have documentation of your classification decision in case it’s ever needed.

Benefits

  • Simplify Complex Regulations: Navigate federal laws with ease thanks to our simple, intuitive questions.

  • Ensure Legal Compliance: Accurately classify workers and reduce your risk of fines and penalties.

  • Save Time and Resources: Streamline the classification process, saving time and money that might otherwise be spent on legal consultations.

  • Individualized Assessments: Obtain worker-specific analyses instead of generic evaluations for better accuracy.

How to Access

The Employee Contractor Analyzer is available as part of the Hiring Docs module. All existing customers have access to this tool, and new customers can use it as part of the Employment bundle.

Did this answer your question?