Wisconsin Independent Contractors laws & compensation compliance analysis

Wisconsin Independent Contractors: What you need to know

Whether a worker is an employee or an independent contractor is critical when it comes to such important issues as pension eligibility, workers' compensation coverage, wage and hour law, and many other matters. In some situations, federal law will govern, but the question is most often resolved by looking to state law, particularly in areas such as unemployment tax liability, workers' compensation, and state wage and hour requirements.
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The state of Wisconsin uses a strict nine-point test to determine whether a person is considered an independent contractor rather than an employee for purposes of workers' compensation. A person must meet and maintain all nine of the following requirements to be exempt from such coverage as an independent contractor (WI Gen. Stat. Sec. 102.07):
• Maintain a separate business.
• Obtain a Federal Employer Identification Number (FEIN) from the IRS or have filed business or self-employment income tax returns with the IRS based on work or service in the previous year. (A Social Security number cannot be substituted for an FEIN to meet this requirement.)
• Operate under specific contracts.
• Be responsible for operating expenses under the contracts.
• Be responsible for satisfactory performance of the work under the contracts.
• Be paid per contract, per job, by commission, or by competitive bid.
• Be subject to profit or loss in performing the work under the contracts.
• Have recurring business liabilities and obligations.
• Be in a position to succeed or fail if business expense exceeds income.
The Wisconsin Supreme Court has ruled that individuals who fail any point of the nine-point statutory test are not independent contractors. ...

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