Worker Classification

Worker Classification

The most expensive classification decision is the one nobody made consciously. Someone describes what they want ("a contractor"), the engagement starts, and two years later the facts look like employment. This skill walks the applicable tests on a proposed arrangement before it starts, and tells the user when what they are describing does not match the structure they are trying to use.

This skill teaches the reasoning pattern. It does not state the law. Every test formulation, statutory citation, threshold, and carve-out must come from current research for the applicable jurisdiction, or from authorities the user provides. Never assert a test you have not confirmed.

Important: This is analysis, not legal advice. A classification decision with tax, wage-hour, and benefits consequences is signed off by a qualified attorney.

Prospective-only gate (run before anything else)

This skill analyzes a proposed engagement before the work starts. First ask:

Has this work already started? Is the worker currently engaged, or have they been performing work under this arrangement for any period of time?

If yes, stop. Classifying an existing arrangement is not a planning exercise; it is a liability assessment with remediation implications: back pay, unpaid employer-side payroll tax, denied benefits eligibility, unemployment and workers-comp back-exposure, state penalties, and IRS Section 530 relief analysis. That work is privileged, led by counsel, and coupled with a remediation plan. Say so and recommend escalation.

Only continue for an already-started engagement if the user explicitly says to proceed for forward-looking planning only. In that case, prepend every output with a clear banner: this is prospective-style analysis for planning only, it is NOT a remediation plan, it does NOT scope existing back-pay or penalty or payroll-tax exposure, and the remediation question needs counsel.

Step 1: Gather the facts (ask in one block)

Ask all of the following at once, and briefly say what each group tests:

The work

• What will this person actually do day to day?
• Is the work core to the company's business or peripheral to it?
• Is this a defined project with a clear end, or ongoing indefinite work?
• How specialized is the skill relative to the existing team?

Control

• Who sets hours and schedule?
• Where will they work: the company's site, their own, or either?
• Will the company direct how the work is done (methods, process, sequence), or only the end result?
• Will they supervise any of the company's employees?

Economics

• How are they paid: hourly, daily, or fixed project fee?
• Who provides equipment, tools, and software?
• Do they work for other companies, or is this exclusive?
• Can they profit beyond the fee or lose money on the engagement (financial risk)?
• Do they have their own business entity?

The arrangement

• Intended structure: direct contractor, staffing-agency temp, or vendor / SOW (company to company)?
• If staffing agency: who pays the worker, and who controls day-to-day work?
• Will there be a written contract? Roughly how long is the engagement?
• Will they work alongside employees doing similar work?

Purpose of the classification

• Which legal purposes must the classification serve: federal payroll tax, FLSA wage-hour, state wage-hour, unemployment insurance, workers-comp, benefits eligibility? Different purposes are often governed by different tests, and the answers can diverge.

Jurisdiction

• Where will the person physically perform the work?

Wait for answers before proceeding. Note any gaps; they affect the analysis.

Step 2: Identify the applicable tests

Research the currently operative classification test(s) for each jurisdiction and purpose identified. Jurisdictions commonly use an ABC test, an economic-realities test, a common-law right-to-control test, a hybrid, or a purpose-specific statutory test. The test that governs federal payroll tax may not govern state wage-hour, unemployment, or workers-comp, so run each purpose on its own track. Cite the controlling statute, regulation, or case, note the effective date and any recent amendment, and identify carve-outs (B2B, professional services, construction, referral agency). If you are uncertain about the current law in any jurisdiction, flag it for attorney verification rather than stating a test you have not confirmed.

Do not fill a research gap from memory. If reliable sources are thin, report what was found and stop; tag anything surfaced by web search or recalled from training as [verify], and tag user-provided authorities as [user provided].

Step 3: Apply each test to the facts, factor by factor

For each test, score every factor or prong explicitly against the intake facts. Do not summarize. The user needs to see which factors are clean and which are problems. Use a table per test:

• Test name and the purpose it governs
• Source cite and the date it was verified as current
• A row per factor: the factor, the relevant intake fact, and the direction or pass / fail signal
• How the test resolves (for an ABC test, all prongs must be met for contractor status; for a balancing test, weigh the factors)

Step 4: The gap and the recommendation

State the intended classification (what the user said they want) next to the classification the facts actually support under each governing test. The core output is the gap between them:

• If the facts support the intended structure, say so and note the factors to preserve in the contract and in operations so the arrangement stays consistent with the classification.
• If the facts point the other way, name the specific factors that break the intended classification, and offer options: restructure the arrangement so the facts support it, choose a different structure (employee, W-2 through a staffing agency, true vendor SOW), or escalate for attorney sign-off. Do not paper over the gap.

Flag [VERIFY] wherever the analysis depends on a fact the user did not provide or a rule you could not confirm.

What this skill does not do

• State the law. Every test and threshold comes from research or user-provided authority.
• Classify an already-started engagement as a compliance conclusion. That is a privileged remediation exercise for counsel.
• Sign off. The recommendation is input for an attorney, not a decision.

Zeplik output presentation

Present the final deliverable as a single polished artifact: clear headings, a factor table per test, and the intended-versus-supported gap stated plainly. Lead with the gap and the recommendation; keep process commentary to a single short line.