Short version: the federal contractor test is being rewritten again, your state's test probably wasn't, and the IRS just changed the filing threshold. None of that changes what actually protects you. Here's what to do, then the regulatory detail if you want it.
Practices that hold up regardless of which rule wins
Federal rules in this area have swung with nearly every change of administration since 2021, and the current rewrite is still in progress. The practices below don't have to swing with it — the underlying factors (control, financial independence, permanence, integration) show up in some form in nearly every version of this test, federal or state.
- Pay for the job, not the clock. Piece-rate, per-job, or invoice-based pay supports genuine profit-or-loss opportunity in a way hourly wages don't. A contractor who can earn more by working faster or taking on more jobs looks like a contractor; one on a fixed hourly rate starts to look like an employee.
- Let them control how and when the work happens. Set the outcome, not the method. Avoid mandating exact hours, exact routes, or exact techniques where the job doesn't require it.
- Let them work for other people. A contractor who is free to (and does) take on other clients is strong evidence of independence. Exclusivity clauses cut against you.
- Favor contractors who bring their own tools and skill. Their own vehicle, their own equipment, their own certifications — investment and specialized skill both weigh in favor of contractor status.
- Scope the relationship to a job, not a tenure. Defined projects, defined seasons, defined scopes of work. Avoid anything that reads as an indefinite, ongoing employment relationship.
- Ensure they exhibit "business-like" behaviors. A contractor who invoices you for work performed, carries their own business insurance, or operates under their own business name looks like an independent business. One who just shows up and gets paid on your schedule looks like an employee, whatever the contract says.
- Get the paperwork right and keep it. A written independent contractor agreement, a W-9 collected before the first payment, and a 1099-NEC issued by January 31 for anyone paid $2,000 or more in 2026. If you can't produce this paper trail on request, the classification is hard to defend no matter how the actual working relationship looked.
- Revisit it — this isn't a one-time decision. The fact that the federal test has changed three times since 2021 is itself the argument for a periodic review, not a "we set it up once" mindset. Loop in an employment attorney or CPA, especially if you operate across multiple states or classify workers at volume.
Where FieldPay fits
Every version of this test asks some version of the same question: does the worker actually get paid like an independent business, job by job, or do they get paid like an employee on a schedule someone else controls? FieldPay's payout model is built around the former — a job gets approved and the contractor gets paid for that job, with a clear record of what they earned and for what. It's not a substitute for a real classification analysis, and it doesn't replace legal advice — but a documented, job-by-job payment trail is exactly the kind of evidence that supports the "profit or loss" and "control" factors every version of this test keeps coming back to.
Regulatory detail
- Federal test is being rewritten. On February 26, 2026, the DOL proposed rescinding the 2024 rule (six equally-weighted factors) and replacing it with a version closer to 2021's: five factors, with control over the work and opportunity for profit or loss weighted as "core."
- Not finalized yet. Comments closed April 28, 2026. As of this writing, no final rule — expect one later this year, and likely litigation after that.
- Enforcement is already ahead of the rule. The DOL stopped enforcing the 2024 rule back in May 2025 and has field staff using older 2008 guidance instead, even though the 2024 rule technically remains the standard in private lawsuits. Build your compliance posture to hold up under either.
- State law is untouched. California's AB5 "ABC test" — employee by default unless you can prove all three prongs (free from company control, work outside the company's usual business, worker runs their own independent trade) — doesn't move with the federal rewrite and is stricter than either version of it. New Jersey and Massachusetts run similar ABC tests. If you operate in one of those states, that's the standard that actually governs your classification decisions there.
- 1099-NEC filing threshold rose. Under the One Big Beautiful Bill Act, the threshold rose from $600 to $2,000 per contractor per year, effective for 2026 payments (inflation-indexed starting 2027). Paperwork-trigger change only — every dollar a contractor earns is still taxable to them whether or not you're required to file a form for it.
This is a summary of publicly available regulatory information as of August 2026, not legal or tax advice. Talk to an employment attorney or CPA before changing how you classify or pay anyone.