Worker classification confusion between independent contractors and employees is more common than you might think—and in Massachusetts, the implications are especially significant. From tax obligations to wage and hour protections, understanding this distinction is crucial. Misclassification can expose businesses to serious legal and financial risks, making it essential to get it right the first time.
Independent Contractors in Massachusetts
Independent contractors are self-employed professionals hired for specific tasks or projects. They typically:
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Provide their own tools and equipment.
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Handle their own tax obligations.
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Do not receive employee benefits, such as paid leave or health insurance.
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Enjoy greater flexibility in how and when they perform their work.
Employees Under Massachusetts Law
Employees, by contrast, are integrated into a company’s operations. They generally:
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Work under the employer’s direction and control.
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Follow set schedules determined by the company.
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Rely on the employer for tools, training, and resources.
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Receive statutory protections and benefits, including paid leave, minimum wage, and overtime.
Massachusetts’ Strict Test for Classification
Unlike many states, Massachusetts applies one of the strictest worker classification standards in the country: the “ABC Test” under the Massachusetts Independent Contractor Law (M.G.L. c. 149, § 148B).
A worker is presumed to be an employee unless the employer can prove all three of the following:
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The worker is free from control and direction in performing the work.
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The work is performed outside the usual course of the employer’s business.
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The worker is customarily engaged in an independent trade, occupation, or profession of the same nature as the work performed.
Failing to meet any of these prongs means the worker must be classified as an employee.
Why Misclassification Matters
Misclassifying workers in Massachusetts can result in:
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Liability for unpaid wages, overtime, and benefits.
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Penalties and fines from the Massachusetts Attorney General’s Office.
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Back taxes, unemployment contributions, and workers’ compensation obligations.
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Potential lawsuits from misclassified workers seeking damages.
Protecting Your Business
Correct classification isn’t just about paperwork—it’s about the actual working relationship. Massachusetts businesses should carefully review how they structure roles and consult with experienced counsel to ensure compliance.
At Denn Law Group in Maynard, MA, we help business owners and professionals navigate complex Massachusetts employment law issues, including independent contractor vs. employee classification. Our attorneys provide clear guidance to minimize risk, protect your business, and keep you compliant with state and federal regulations.
If you have questions about worker classification or are concerned about a potential misclassification issue, contact Denn Law Group today for a consultation.