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The distinction between employee and independent contractor is crucial in determining the application of several important federal and state laws, including those involving wages and withholding taxes, as well as such entitlements as eligibility for workers’ compensation. Generally, when disputed, there is no single, dispositive test for government agencies to determine whether workers are independent contractors to a company, or employees thereof. Moreover, different criteria and legal tests are used for determining worker status, because each government agency is concerned with worker classification for a different reason. Accordingly, agencies may use their own independent worker classification criteria, without regard to what other agencies have done. By analogy, this is similar in application to that of a person who might be considered “disabled” for purposes of workers’ compensation, but not for social security benefits. Also possible (but not common) is the result that a worker may be deemed an independent contractor in one state, but an employee in another.

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