A Massachusetts independent contractor agreement is a document that defines a business relationship between a contractor and a client. It is also called a consulting or service agreement.
There are many differences between Massachusetts employees and independent contractors. If you don’t follow state laws for employee classification, you may face civil penalties or criminal enforcement.
- Worker Classification: ABC Test
- Tax Structure: Graduated-Rate Income Tax
- Definition: § 149 – 148B
- At-Will Employment: Yes (with exceptions)
Independent Contractor Definition
According to MGL c. 152, § 1(4), an employee is anyone under the service of another under any contract of hire, oral or written, express or implied. Exceptions include:
- Seamen engaged in foreign or interstate commerce.
- Salesmen of consumer goods or real estate who work on a commission or on a buy/sell basis.
- Taxi drivers leasing their cabs on a fee basis unrelated to fares collected.
- People engaged in foreign or interstate commerce that is covered by federal law for compensation for death or injury.
Worker Classification Test
Massachusetts law considers most people who provide services or work as employees. This means they have rights to overtime, minimum wage, and other protections. An employer who wants to classify a worker as an independent contractor must show that the worker [1] :
- Performed the services without the control and direction of the employer.
- Performed the services outside the employer’s business.
- Has their own independent trade or business in the same line of work.
This is known as the ABC test.
Rights and Responsibilities
Unlike employees, independent contractors do not have rights to overtime, minimum wage, and other protections.
State Taxes
Massachusetts’ income tax law has the same definition of employee as section 3401(c) of the Internal Revenue Code [2] . This means that anyone who performs services for you is an employee if you have control over how they perform the service and what they do.
Workers who do not fall under the definition of employee are independent contractors. According to the Internal Revenue Service, you should use Form 1099-NEC to report payments for independent contractor services.
Filing for Unemployment
Independent contractors do not file for unemployment — only employees do. Under Massachusetts unemployment insurance law, a worker is assumed to be an employee unless they can meet the requirements of the ABC test.
Compensation for Work Injuries
According to the Massachusetts Workers’ Compensation Act, Mass. Gen. Laws ch. 152, §1(4), HB1857, and S. 1066 [3] , independent contractors are not covered by workers’ compensation — only employees are. Courts will use the ABC test to determine worker status when determining whether they should receive workers’ compensation.
Sample
Below, you can download our free Massachusetts independent contractor agreement template in PDF or Word format:
