Compliance Resources

Comparison of State Unemployment Insurance Laws 2008

EMPLOYER-EMPLOYEE RELATIONSHIP

Most state laws contain strict tests to determine whether there is sufficient absence of control by an employer that the worker is not an employee, but an independent contractor. More than half the states provide criteria commonly called the “ABC” test under which service for remuneration is considered employment and the worker is an employee unless each of three tests are passed:

The worker is free from control or direction in the performance of the work under the contract of service and in fact;

The service is performed either outside the usual course of the business for which it is performed or is performed outside of all places of business of the enterprise for which it is performed; and

The individual is customarily engaged in an independent trade, occupation, profession or business.

Other states have variations of this “ABC” test. For example, in some states only the “A” and “C” tests apply. The tests used in states are listed in the table below.

EMPLOYEE: WORKERS CONSIDERED EMPLOYEES UNLESS:

State

Workers free from control over performance

(A)

Service outside regular course or place of employer’s business
(B)

Worker in an independent business

(C)

Other tests

State
Related Resources
(Provided By Corporate Aviators, Inc.)

AK

X

X

X

AK

AL

Master-servant 1/

AL

AR

X

X

X

AR

AZ



Service per-formed by an employee for the entity employing him.

AZ

CA







Contract of hire, written or oral, express or implied. 2/

CA

IC Misconceptions

Employee or IC

Employment Determination

CO

X

X

CO

CT

X

X

X

CT
CT ABC Test

DC







Contract of hire, written or oral, express or implied; by regulation

DC

DE

X

X

X

DE

FL

2/

FL
FL Employment Information

GA

X

X

GA
GA Employment Test

HI

X

X

X

HI

IA

X



Contract of hire, written or oral, express or implied.

IA

ID

X

X

ID

IL

X

X

X

IL
IL ABC Test

IN

X

X

X

IN
IN Employment Test

KS

X

X

KS

KY

Master-servant 1/ By judicial interpretation.

KY

LA

X

X

X

LA

MA

X

X

X

MA
MA ABC Test

MD

X

X

X

MD
MD Employment Test

ME

X

X

X

ME

MI

X



Contract of hire, written or oral, express or implied.

MI
MI Employment

MN



X

Master-servant   1/

MN

MO

Common law of right to control.

MO

MS

X

Master-servant   1/

MS

MT

Works under approved IC exemption certificate.
MT

NC

Contract creating employee relationship.

NC

ND

20-factor test

ND

NE

X

X

X

Contract creating employee relationship.

NE
NE ABC Test

NH

X

X

X

NH
NH ABC Test

NJ

X

X

X

NJ
NJ ABC Test

NM

X

X

X

NM

NV

X

X

X

NV
NV ABC Test

NY





Contract of hire, written or oral, express or implied.

NY

IC Determination

NYS Guide

IC Pamphlet IA 318.14
NY Gov. Exec. Order

OH

X

Contract of hire, written or oral, express or implied.

OH
OH Employment Test

OK

X

X

X

OK

OR

X

X

OR

PA

X

X

PA

PR

X

X

X

PR

RI

X

X

X

RI

SC





Contract of hire, written or oral, express or implied.

SC

SD

X

X

SD

TN

X

X

X

TN

TX

Common law.

TX
TX Employment Test

UT

X

X

UT

VA

20-factor test

VA
VA Employment

VI

X

X

X

VI

VT

X

X

X

VT

WA

X

X

X

WA
WA Employment Test

WI

Statutory factors 3/

WI

WV

X

X

X

WV

WY

X

4/

WY

1/ Refers generally to the employer’s right of direction and control.

2/ In addition to the A, B, and C tests, the following tests are considered: 1) in locality, work is usually done by specialist without supervision; 2) specialized skill is required in the particular occupation; 3) length of time for which person is employed suggests an independent relationship; 4) method of payment is the by the job rather than by time; 5) parties do not believe they are creating a master and servant relationship, and 6) principal is not in business; 7) CA: principal does not supply the instrumentalities, tools, and the place of work for the person doing the work.
3/ Direction and control and independent business (i.e. AC) test used for governmental and nonprofit entities and loggers and truckers.
4/ Individual must represent services to the public as being in self-employment or as an independent contractor, and individual must be able to substitute another individual to perform services.

EMPLOYMENT SPECIFICALLY EXCLUDED

State exclusions from employment generally follow the FUTA exclusions. However, the states often exclude other types of employment as well. This section presents a brief discussion of each of the exclusions which occur in all or nearly all the state laws. A great many miscellaneous exclusions, which occur in only a few states and affect relatively small groups, are not included. The following table provides an overview of some of the basic exclusions from the definition of employment used by states.

SIGNIFICANT MISCELLANEOUS EMPLOYMENT EXCLUSIONS
State	Insurance Agents On Commission	Real estate Agents on Commission	Casual Labor Not in Course of Employer’s Business	Part-Time Service for Nonprofit Organizations Exempt from Federal Income Tax ₁_/
AL	X	X	X	X
AK	X	X	X	X 1/ 2/
AZ	X	X	X	X
AR	X	X	X	X
CA		X	X	X
CO	X	X	X	X
CT	X	X	X	X
DE	X	X
DC	X		X	X
FL	X	X	X	X
GA	X	X	X	X
HI	X	X	X	X 2/
ID	X	X
IL	X	X		X
IN	X		X	X
IA		X
KS	X	X	X	X
KY	X	X	X	X
LA	X	X	X	X
ME	X	X		X 1/
MD	X	X	X	X
MA	X	X	X	X
MI	X	X		X
MN	X 3/	X 3/	X
MS	X	X	X	X
MO	X	X
MT	X	X	X
NE	X	X	X	X
NV		X
NH	X	X	X	X
NJ	X	X
NM	X	X
NY		X
NC	X	X	X	X
ND	X	X	X	X
OH	X		X	X
OK	X	X
OR	X	X	X
PA	X	X	X
PR		X	X
RI	X 3/	X	X	X
SC	X	X	X	X
SD	X			X
TN	X	X
TX	X	X
UT	X	X	X	X
VT	X	X	X	X
VA	X	X	X	X
VI			X
WA	X	X	X
WV	X
WI	X	X		X
WY		X	X
1/ In all states this exclusion is limited to remuneration of less than $50 in any calendar quarter , except in AK, (less than $250) and ME (less than $150). 2/ Does not exclude just part-time service. 3/ RI does not exclude such service if performed for a corporation or by industrial and debit insurance agents; MN does not exclude such service if performed by a corporate officer.

*Reference: www.ows.doleta.gov/unemploy/uilawcompar/2008/comparison2008.asp

The information provided on this page is for informational purposes and is not intended as legal or accounting advice and should not be used as a substitution for consultation with professional legal or accounting advisors. We have made every attempt to ensure that the information contained herein has been obtained from reliable sources.