Summary: Massachusetts applies stricter criteria than federal law when determining independent contractor status. The Massachusetts Attorney General’s Office and the Massachusetts Department of Unemployment Assistance employ similar three-prong tests in determining whether a worker is an employee or independent contractor. Both tests presume employee status. The Massachusetts Department of Revenue employs the IRS 20-Factor Test in determining whether a worker is an employee or independent contractor for income tax-withholding obligations. The Massachusetts Department of Industrial Accidents employs a hybrid test in determining whether a worker is an independent contractor. The potential penalties for misclassification are significant.
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