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What is a Common Law Employee? A Comprehensive Guide
Definition & Meaning
A common law employee is an individual recognized as an employee under common law principles. This status is determined by the level of control the employer has over the employee's work. Specifically, a common law employee is someone who performs tasks for an employer who directs not only the outcomes of the work but also the methods used to achieve those outcomes. Even if the employer allows some freedom in how tasks are completed, the employee is still classified as a common law employee due to the employer's overall authority.
Table of content
Legal Use & context
The term "common law employee" is frequently used in employment law, tax law, and labor relations. It helps define the relationship between workers and employers, particularly in determining rights and responsibilities. This classification affects various legal aspects, including benefits eligibility, tax obligations, and liability issues. Users can manage related forms or procedures through resources like US Legal Forms, which provide templates created by experienced attorneys.
Key legal elements
Real-world examples
Here are a couple of examples of abatement:
Example 1: A marketing manager at a company is considered a common law employee because the employer controls their work schedule and the methods used to achieve marketing goals.
Example 2: A software developer working remotely for a tech firm is also a common law employee, as the employer dictates project deadlines and coding standards. (hypothetical example)
State-by-state differences
Examples of state differences (not exhaustive):
State
Common Law Employee Definition
California
California follows the ABC test for determining employee status, which may affect common law employee classification.
New York
New York courts focus on the degree of control exercised by the employer to determine common law employee status.
Texas
Texas uses similar criteria as federal law but may have specific state laws affecting employee classification.
This is not a complete list. State laws vary, and users should consult local rules for specific guidance.
Comparison with related terms
Term
Definition
Independent Contractor
A worker who provides services to a company but operates independently and is not controlled by the employer.
Employee
A broader term that includes common law employees but may also encompass those classified under statutory definitions.
Leased Employee
A worker who is technically employed by a staffing agency but works for another company.
Common misunderstandings
What to do if this term applies to you
If you believe you are classified as a common law employee, consider reviewing your employment agreement and the degree of control your employer has over your work. If you have questions or concerns, you can explore US Legal Forms for templates that can help clarify your rights and responsibilities. For complex issues, seeking professional legal advice is recommended.
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