In determining whether individuals in Alaska are employees or independent contractors under wage and hour law, employers must use the ABC test. The following three conditions must be met to qualify as an independent contractor:
A. Lack of direction and control:
• Control is exercised when workers are totally dependent upon the employer economically. The employer exercises the necessary control of the employee through monetary means. For example, a worker who performs services primarily for one company would be economically dependent upon that company.
• If an employer and not the worker bears responsibility for the finished product or legal responsibility for the performance of the service; therefore, the worker who made the product or performed the service is an employee for unemployment insurance tax purposes.
• In contract labor, the entity contracting to have the work done is concerned only with the finished product. In an employer-employee relationship, concern is with the way the work is done.
• An independent contractor has freedom of action. This freedom of action allows independent contractors to choose their own hours and days of work and materials, acquire their own customers, hire their own assistants, and set ...