A Wisconsin independent contractor agreement is a legal contract that outlines how a contractor will work for a client. The client maintains control over the final results and can dictate the scope of work, but the contractor retains independence over how they complete their work.
- Worker Classification: A variation of the ABC test
- Tax Structure: Graduated-Rate Income Tax
- Definition: Wisconsin Statutes § 108.02
- At-Will Employment: Yes
Independent Contractor Definition
Employees are workers who perform services for compensation for an employer, regardless of whether the worker is paid directly by the employer, with a few exceptions. Independent contractors are workers who meet Wisconsin’s independent contractor test and whom the state classifies as independent contractors.
Like many states, Wisconsin treats workers as employees until they are proven to be independent contractors.
Worker Classification Test
Wisconsin uses a modified ABC test to determine the classification of its workers. In Wisconsin, a worker must meet Prongs A and C to be classified as an independent contractor. If a worker doesn’t meet both prongs to the government’s satisfaction, they’ll receive an employee classification. The two prongs are:
- Prong A: Is the worker free from the control and direction of the client?
- Prong C: Is the worker customarily engaged or available per job? If most of the worker’s income derives from the company, they are more likely to be categorized as an employee than if their income comes from multiple companies.
Wisconsin courts also examine five factors to determine whether a worker performed services in a business where they were customarily engaged or in an independently established trade. These five factors are:
- Integration
- Advertising
- Entrepreneurial risk
- Economic dependence
- Proprietary interest
Rights and Responsibilities
While independent contractors in Wisconsin may have more freedom in certain aspects of their business, they have more responsibilities in many other areas. Most workers’ rights are based on being an employee. Wisconsin’s independent contractors generally lack the following rights:
- Workers’ compensation rights
- Minimum wage rights
- Overtime pay rights
State Taxes
Wisconsin defers to the Internal Revenue Service’s (IRS) criteria for worker classification purposes regarding other revenue issues. Independent contractors pay self-employment taxes of 15.3% to the IRS. Depending on how much they earn, they also pay between 3.54 percent and 7.65 percent for individual income tax. [1]
Filing for Unemployment
Independent contractors generally cannot file for unemployment in Wisconsin.
Sample
View a Wisconsin independent contractor agreement and download it as a PDF or Word file:
