Independent Contractor Classification and Risk Kit

Before engaging an independent contractor, review how the working relationship will be classified. The kit brings together three tests, a per-worker risk assessment, a cost comparison, and agreement templates with clear points for counsel review. You can examine the facts, document your reasoning, and make a more informed decision.

Seven files for reviewing classification and preparing agreements

Start with the guide to understand the tests. Use the workbook to assess classification risk and compare costs, then prepare the agreements. The resources are designed to work together for one engagement.

• Start Here. An introduction to the resources and the order to use them. It explains that the classification tests operate independently and that state law may impose stricter requirements.
• Classification Decision Guide. Explains the three tests: DOL economic-reality factors, with dates for the 2024 rule, 2025 enforcement bulletin, and 2026 proposed rule; IRS common-law categories; and the ABC test, including stricter state requirements. It also covers common classification mistakes and what to do when a decision needs review.
• Classification and Cost Workbook. A per-worker questionnaire that produces a low, review, or high risk result and shows the reasoning behind it. Includes a 1099-versus-W-2 cost comparison tied to the burden model. Opens on a worked example.
• IC Agreement and SOW Templates. An independent contractor services agreement covering classification language, IP assignment, non-solicitation, insurance, and invoicing terms, plus a statement of work exhibit. Each includes an instruction for counsel review. Opens in Word or Google Docs.
• Quick Reference (PDF). The whole workbook on one page, including what each tab is for, what you enter, and how to read the result.

How to review a contractor arrangement

Start with the classification tests, assess the working relationship, compare the costs, and prepare the agreement. Reviewing the facts first matters because an agreement alone cannot establish independent contractor status.

• Review the three classification tests. The guide explains the DOL economic-reality factors, the IRS common-law test, and the state ABC tests. Each applies independently. Federal rule developments are identified by date.
• Assess each worker's arrangement. Complete the questionnaire for each worker using the factual questions from the classification tests. It produces a low, review, or high risk result with the supporting reasoning visible. The result is a risk assessment, not a legal determination.
• Compare the costs. Use the 1099-versus-W-2 comparison to calculate the engagement costs under both arrangements, using the actual burden model rather than an assumed saving.
• Prepare the engagement documents. Use the agreement and statement of work with their classification language and instructions for counsel review. Send high risk and review results to counsel before signing.

Classification depends on the working relationship

An independent contractor agreement is part of the arrangement, but the classification tests examine how the work is actually performed. The kit helps you review that working relationship before preparing the agreement.

• Federal rule developments. The guide dates the 2024 rule that still governs private litigation, the 2025 non-enforcement bulletin, and the 2026 proposed rule that is not final. A check-current-status banner reminds you to verify the applicable requirements.
• A documented risk assessment. The questionnaire produces a low, review, or high risk result with the supporting reasoning visible. It identifies classification questions for counsel review rather than making a legal determination.
• State classification requirements. The ABC test and states with stricter requirements have their own section. A worker may satisfy a federal test but not California's requirements, which can create classification liability.
• A record of each review. The questionnaire for each worker documents the facts considered and the reasoning behind the assessment. You have a record to refer to if the classification decision is later questioned.

Who this is for and other options

Built for

• An operator or HR lead engaging contractors who wants to document the classification review as part of the decision.
• A finance partner comparing 1099 versus W-2 using actual burden numbers rather than an assumed saving.
• A consultant or fractional HR lead establishing a consistent contractor classification review process for a client.

If you are looking for

• For agency-supplied workers and their terms, the Staffing Agency Management Kit covers the agency relationship.
• For the cost side of the program, the Contingent Labor Cost and Conversion Workbook models agency versus payroll.

Before you buy

Is the questionnaire a legal determination?

No. The questionnaire is a structured screen based on the factual questions in the classification tests. It produces a low, review, or high risk result and shows the reasoning behind it. Close classification decisions go to qualified employment counsel, as stated in every file.

Which classification test applies to me?

All three may apply independently: the DOL economic-reality test for federal wage law, the IRS common-law test for employment tax, and a state test such as the California ABC test where one applies. Meeting one test does not establish that the worker meets the others. The guide explains each separately.

What is happening with the federal classification rule?

The guide explains three developments separately. The 2024 rule remains on the books and governs private litigation. A 2025 bulletin states that the DOL is not applying that rule in its own enforcement. A 2026 proposed rule that would rescind it was not final as of the last review date. The guide includes a check-current-status banner so you can verify the applicable requirements.

Are the agreements ready to sign?

The agreements are complete, editable templates with classification language and instructions for counsel review. The clauses that most need review are marked. Have qualified employment counsel adapt the agreements to your state and situation before signing.

Is it a subscription?

No. This is a one-time purchase with no recurring fee.

How do I know when it was last checked?

Each file carries a last-reviewed date, and every threshold and test is dated in the text. Rules change, so confirm the current rule before you rely on a result.

What is the refund policy?

Digital products are covered by a 30-day money-back guarantee. To request a refund, email support@truestephr.com or reply to your receipt within 30 days of purchase.

What happens after I buy?

Your download link appears immediately after checkout. Your receipt arrives by email with the same link. Open the Start Here page first for the recommended order. For setup questions, email support@truestephr.com.

Can I expense this purchase to my business?

A tool you use for work often qualifies as a deductible business expense, but that depends on your situation, so confirm with your accountant. Your receipt arrives by email at checkout and works as documentation.

General information, not legal advice. Have qualified employment counsel review any classification decision, agreement, or notice before you act on it.

How the download works

Your files arrive as a single ZIP download, best opened on a computer. Save it, extract it (right-click and select Extract All on Windows, or double-click on a Mac), then open the Start Here file first. PDFs open in any reader, and editable files work in Microsoft Word and Excel or free equivalents, including LibreOffice, Google Docs, and Google Sheets. No other software is needed. Step-by-step help for every device is at truestephr.com/pages/download-help.