Independent Contractor Laws by State 2026

Contractor Test

A&B or A&C of ABC Test

A&C of ABC Test

ABC Test

Common Law

State	Contractor Test 2025↓	Additional Independent Contractor Law Details 2025
Alaska	ABC Test
Arkansas	ABC Test
California	ABC Test	Proposition 22, which allows rideshare companies like Uber and Lyft to classify drivers as independent contractors, was approved by voters. Although they are not considered employees, the new law requires that specific labor and wage policies be put in place for app-based drivers, which you can view here. Meanwhile, the “Save Local Journalism Act” allows newspaper publishers to wait one more year until they are required to classify their newspaper carriers as independent contractors. The extension expires on January 1, 2022.
Connecticut	ABC Test
Delaware	ABC Test
Georgia	ABC Test
Hawaii	ABC Test
Illinois	ABC Test
Indiana	ABC Test
Kansas	ABC Test
Louisiana	ABC Test	Louisiana added a definition of “employee” to their existing classification law. The new definition reads: “An ‘employee’ means an individual who performs services for an employer where there exists a right by the employer to control what work the employee does or how the employee performs his job or where the employer provides the tools and supplies to the employee for the performance of the job.”
Maine	ABC Test
Maryland	ABC Test
Massachusetts	ABC Test
Nebraska	ABC Test
Nevada	ABC Test
New Hampshire	ABC Test
New Jersey	ABC Test
New Mexico	ABC Test
Ohio	ABC Test
Oregon	ABC Test
Rhode Island	ABC Test
Tennessee	ABC Test
Utah	ABC Test
Vermont	ABC Test
Washington	ABC Test
West Virginia	ABC Test
Colorado	A&C of ABC Test
Idaho	A&C of ABC Test
Montana	A&C of ABC Test
Pennsylvania	A&C of ABC Test
Wisconsin	A&C of ABC Test
Wyoming	A&C of ABC Test
Oklahoma	A&B or A&C of ABC Test
Virginia	A&B or A&C of ABC Test	HB 1407 makes it illegal to misclassify an employee as an independent contractor under the IRS common law test. The Virginia Department of Taxation is allowed to investigate and impose civil penalties of up to $1,000 for each misclassified employee for the first offense, and up to $5,000 per employee for further offenses. The new law takes effect on January 1, 2021.
Alabama	Common Law
Arizona	Common Law
District of Columbia	Common Law
Florida	Common Law
Iowa	Common Law	SB 2296 established a new rule making workers who operate certain vehicles are classified as independent contractors instead of employees effective July 1, 2021.
Kentucky	Common Law
Michigan	Common Law
Minnesota	Common Law
Mississippi	Common Law
Missouri	Common Law
New York	Common Law
North Carolina	Common Law
North Dakota	Common Law
South Carolina	Common Law
South Dakota	Common Law
Texas	Common Law

Independent Contractor Classification Legal rules used to determine whether a worker is an independent contractor or an employee for purposes such as taxes, benefits, and labor protections.

Independent Contractors vs. Employees

Independent contractors and employees are treated differently under labor and tax laws, and correctly classifying a worker can affect wages, benefits, tax obligations, and legal protections. Independent contractors typically operate as self-directed workers who provide services to clients under contract, often setting their own schedules, using their own tools, and handling their own taxes and business expenses.

Employees, by contrast, generally work under the direction and control of an employer. Because these distinctions affect taxes, workplace protections, and liability, federal and state governments apply specific legal tests to determine whether a worker should be classified as an independent contractor or an employee.

The ABC Test for Independent Contractors

Many states use the ABC test to determine whether a worker can be classified as an independent contractor. Under this framework, a worker is presumed to be an employee unless the hiring entity can show that all three conditions of the test are met.

The test requires that (A) the worker is free from the hiring entity’s control when performing the work, (B) the work is outside the usual course of the company’s business, and (C) the worker is engaged in an independently established trade or business. Condition B is often the most difficult to satisfy, particularly in industries where freelancers perform the same type of work as the hiring company.

States That Use the ABC Test

As of 2026, several states rely on the full ABC test when determining whether a worker qualifies as an independent contractor. In these states, workers must meet all three conditions to be classified as independent contractors.

States that apply the ABC test include Alaska, Arkansas, California, Connecticut, Delaware, Georgia, Hawaii, Illinois, Indiana, Kansas, Louisiana, Maine, Maryland, Massachusetts, Nebraska, Nevada, New Hampshire, New Jersey, New Mexico, Ohio, Oregon, Rhode Island, Tennessee, Utah, Vermont, Washington, and West Virginia.

States Using Conditions A and C of the ABC Test

Some states use a modified version of the ABC test that requires workers to meet Conditions A and C, rather than all three parts of the standard test. This approach still evaluates whether a worker operates independently but removes the requirement that the work be outside the hiring entity’s core business.

States using this A and C standard include Colorado, Idaho, Montana, Pennsylvania, Wisconsin, and Wyoming. In these states, the key questions focus on whether the worker operates free from company control and maintains an independently established business or trade.

States Allowing A and B or A and C of the ABC Test

A small number of states allow more flexibility by permitting workers to qualify under either Conditions A and B or Conditions A and C of the ABC test. This structure allows different combinations of independence factors to satisfy the classification requirements.

As of 2026, Oklahoma and Virginia use this approach. These frameworks still evaluate whether a worker operates independently but allow multiple pathways for determining independent contractor status.

States Using the Common Law Test

States that do not use the ABC test typically rely on the Common Law test, which is based on guidance from the Internal Revenue Service (IRS). Instead of a strict checklist, this approach evaluates the overall relationship between the worker and the hiring entity.

The Common Law test focuses on three main factors: behavioral control (who directs how the work is done), financial control (who controls pay, expenses, and tools), and the relationship of the parties (including benefits, contracts, and the permanence of the working arrangement).