Common Law Employment Definition

Common law employment is a legal term for the “traditional” employee status that describes anyone who performs services if the employer can control their work. The IRS has specific criteria that define whether a worker is a common-law employee.

Common Law Extended Definition
With common law employment, the employer dictates what work the employee is required to do and also has the ability to dictate specifically how the work is to be done.

Small business owners must correctly determine the status of a worker as either a common-law employee or an independent contractor.

Employers can use IRS common law rules to determine common law employment. The criteria includes three categories:

• Behavioral
• Financial
• Type of relationship

Related Articles
Who Is an Employee? | Patriot Software
Employee (Common-Law Employee) | IRS

Last Updated By

Rachel Blakely-Gray | Feb 15, 2023