Massachusetts starts from employee status and puts the burden on the business
Massachusetts guidance explains that workers are generally presumed to be employees unless the business can establish the requirements of the applicable independent-contractor test. Under the three-part framework highlighted by the Attorney General, the worker must be free from control and direction in connection with the performance of the service; the service must be performed outside the usual course of the employer’s business; and the worker must be customarily engaged in an independently established trade, occupation, profession, or business of the same nature. The parts are conjunctive rather than a balancing exercise.
This is a different compliance posture from a test where strong evidence on several factors can outweigh weak evidence elsewhere. The employer file should not contain one conclusion called “independent contractor factors.” Create three findings. If the record cannot support Part Two, additional autonomy under Part One does not fill the gap. If the worker has a thriving outside business under Part Three, that does not prove the service is outside the company’s usual course. The discipline of separate findings is particularly valuable in Massachusetts because it exposes which business-model fact, not which contract phrase, controls the risk.
Define the company’s usual course from customers and revenue before defining the worker’s role
The phrase “usual course of business” can become circular if management starts with the desired classification. A better analysis begins with the enterprise itself. What does the company hold itself out as providing? What do customers buy? Which services appear in proposals, invoices, marketing pages, contracts, licensing records, and revenue reports? Which activities are recurring rather than incidental to running the enterprise? Write that description before inserting the contractor’s duties.
Then compare the worker’s service with that description. A dental practice engaging a plumber for a pipe repair presents a different Part Two record from a home-repair platform hiring people to perform the repairs it sells to homeowners. An accounting firm may have a clearer issue when a contractor prepares client tax returns than when a contractor paints the office. Avoid abstract statements such as “we are a technology company” if the actual customer offer is outsourced bookkeeping, tutoring, design, delivery, or another service. The file should let a reader understand the revenue-producing activity without knowing the company in advance.
Part One should distinguish result standards from control over performance
Freedom from control and direction requires more than a clause saying the contractor controls the manner and means of work. Collect the operating evidence: who determines schedule, sequence, methods, staffing, location, customer interaction, required meetings, training, and day-to-day approvals. Some requirements may define the purchased result or protect safety, confidentiality, or client data. Others may show that the business directs how the person performs the service.
A useful control log records both favorable and unfavorable facts. If contractors choose their work blocks but must attend a daily internal stand-up, record both. If they can reject assignments but must follow a detailed script for every customer conversation, record both. The objective is not to curate only independent facts; it is to determine whether the actual arrangement can support the statutory requirement. When operations drift after onboarding, update the classification rather than relying on the original agreement.
Part Three asks for an independent enterprise of the same nature, not just an entity shell
The third part looks for a worker customarily engaged in an independently established trade, occupation, profession, or business of the same nature as the service performed. Evidence should therefore connect the person’s outside enterprise to the work at issue. A graphic designer with a public portfolio, multiple design clients, independent pricing, software subscriptions, business insurance, and continuing marketing activity presents a different record from a person who formed an LLC at one company’s request and performs no similar work elsewhere.
Do not make a second-client rule that the statute does not literally state, but do investigate whether the enterprise is real and independently established. Ask how the worker finds business, what happens when this contract ends, whether the worker has business assets or obligations, whether services are available to the market, and whether the worker bears ordinary business risk. Preserve contemporaneous evidence instead of requesting a freshly created website or business card solely to improve the classification file.
Do not assume one Massachusetts test answers every employment-law question
Massachusetts has multiple agencies and statutes with worker-classification consequences, and official unemployment guidance should be read for the unemployment context rather than assumed to be identical in every detail to wage-law analysis. The Department of Unemployment Assistance provides its own guidance for unemployment requirements involving independent contractors. A business reviewing unemployment tax should identify the exact program and legal standard at issue instead of citing a wage-law webpage as though it automatically resolves all state obligations.
Create a scope line at the top of the memo: for example, “Massachusetts unemployment insurance classification review” or “Massachusetts wage-law contractor review.” List the official authority used for that scope. If the company needs one operating classification across payroll, wage, workers’ compensation, tax, and other regimes, reconcile the standards with qualified advisers. The safest internal rule is not “the strictest always wins”; it is “do not silently substitute one legal test for another.”
A role-by-role revenue map is more useful than a stack of contractor agreements
For recurring contractor classes, build a revenue map that connects the company’s customer promises to the work performed. List the service lines, the percentage or materiality of revenue they represent, who performs each step, and which steps are purchased from outside specialists. This makes Part Two review concrete. It also reveals when a role that began as peripheral has moved into the company’s usual course as the business model changes.
Repeat the map at material product or service launches. A software company may initially hire a freelance translator for occasional internal material. If it later sells paid localization as a core customer service and routes customer localization through the same contractor class, the Part Two facts have changed even if the contracts have not. Classification governance should follow the operating business, not the date the template agreement was first signed.
Prepare the audit record so each part can be tested without reconstructing the company from scratch
A defensible file includes a dated description of the company’s business, the worker’s actual duties, the control record, evidence of the worker’s independent enterprise, the signed agreement, payment records, and a finding under each part. If the company relies heavily on Part Two, attach customer-facing materials and representative invoices that prove what the company ordinarily sells. If it relies on Part Three, save external evidence that predates the review where possible.
End with change triggers. Examples include the contractor beginning to deliver a new core service, managers imposing fixed procedures, exclusivity becoming practical even if not contractual, or the worker winding down the outside business. A Massachusetts analysis is not a permanent certificate. The file has value only if it describes a relationship that still exists.
USUAL-COURSE TOOL
Customer-offer to contractor-work map
Complete this before writing the Part Two conclusion. It forces the analysis to start with the business customers actually buy from.
| Business evidence | What it says the company sells | Contractor service | Part Two question |
|---|---|---|---|
| Website/service page | Example: residential cleaning subscriptions | Performs customer cleanings | Same service the business sells? |
| Customer proposal | Example: software implementation package | Performs one-off electrical office repair | Incidental facility service? |
| Revenue report | Example: 70% tax preparation, 30% advisory | Prepares client returns | Inside principal revenue activity? |
| New product launch | Example: localization now sold to clients | Translates paid customer deliverables | Did an old peripheral role become usual-course work? |
| Vendor invoice | Describe purchased result precisely | Compare with employee/core-team work | Is the vendor filling the ordinary delivery function? |
WORKED EXAMPLE
Example: a bookkeeping company cannot define itself as “business services” to avoid Part Two
A Massachusetts company markets monthly bookkeeping to small businesses and hires two individuals as contractors to reconcile customer accounts. The workers choose hours and both maintain small outside practices, so management focuses on Parts One and Three. Its draft memo describes the company broadly as a “business-services platform” and says bookkeeping is therefore only one activity.
The revised review begins with customer contracts and revenue. Nearly all recurring revenue is payment for bookkeeping, and the contractors perform that same customer deliverable. The company flags Part Two as a serious issue rather than hiding it behind a broad industry label. That conclusion gives management a real classification decision to make instead of a polished but circular memo.