Free compliance workflow tool · reviewed September 9, 2026

Worker classification review checklist for 2026

Use this checklist to gather and review facts about a working relationship. It keeps the Department of Labor's 2026 proposed FLSA analysis separate from the IRS federal employment-tax framework and reminds you to review state and local rules. It does not score a worker as an employee or contractor.

Read the 2026 classification status →Misclassification guide

Current federal status

The Department of Labor announced a proposed rule on February 26, 2026 and the comment period closed April 28, 2026. As of this page's September 9, 2026 review, DOL's official page still describes the framework as proposed rulemaking. The IRS separately continues to use common-law evidence grouped into behavioral control, financial control, and the type of relationship for federal employment-tax purposes.

Review progress

0%0 of 11 review areas documented

Completion means you have reviewed and documented the area. It does not mean the worker qualifies as an independent contractor.

DOL 2026 proposed FLSA analysis

The Department of Labor's February 2026 proposal uses five non-exclusive economic-reality factors and gives greater probative value to the first two. The proposal is not a final rule as of September 9, 2026.

Nature and degree of control over the work · proposed core factorDocument who controls scheduling, supervision, work methods, pricing constraints, and the ability to accept or decline work.Evidence to gather: Actual operating practices, assignment terms, manager instructions, scheduling records, and contract terms.

Opportunity for profit or loss · proposed core factorDocument whether the worker can exercise managerial skill that changes profit or loss, including pricing, expenses, helpers, investments, or business development.Evidence to gather: Pricing practices, unreimbursed expenses, investments, subcontracting or helper arrangements, and evidence of serving a market.

Skill required for the workDocument the specialized skill involved and whether the worker uses that skill with business initiative rather than relying primarily on company training or direction.Evidence to gather: Credentials, portfolio, independent training, business materials, and the way the worker applies specialized judgment.

Permanence of the working relationshipDocument whether the relationship is project-based, sporadic, seasonal, recurring, or expected to continue indefinitely.Evidence to gather: Engagement dates, project scopes, renewal patterns, exclusivity terms, and the worker’s other client relationships where relevant.

Work as part of an integrated unit of productionDocument how the worker’s services fit into the business’s production process and how dependent that process is on the worker’s role.Evidence to gather: Workflow diagrams, role descriptions, handoffs, supervision structure, and how the service relates to the business’s output.

IRS federal employment-tax review

The IRS uses a separate common-law framework for federal employment-tax purposes. Review behavioral control, financial control, and the type of relationship rather than assuming the DOL analysis answers the tax question.

IRS behavioral controlReview the right to direct what work is done and how it is performed, including instructions, evaluation systems, and training.Evidence to gather: Instructions, training, quality-control practices, supervision, evaluation criteria, and actual day-to-day work methods.

IRS financial controlReview the financial and business aspects of the work, including expenses, investment, market availability, payment method, and profit or loss.Evidence to gather: Invoices, expense responsibility, equipment ownership, marketing activity, payment structure, and investment records.

IRS type of relationshipReview contracts, benefits, permanence, and whether the services are a key activity of the business.Evidence to gather: Agreements, benefit policies, engagement duration, termination terms, and role/business relationship documentation.

Jurisdiction and operating-reality checks

Federal tests are not the whole analysis. State and local rules can differ, and documents should match the way the relationship actually operates.

State and local worker-classification rulesIdentify every state or locality that may apply and review its current classification, wage, unemployment, workers’ compensation, and related requirements.Evidence to gather: Applicable jurisdiction list, current agency guidance, counsel or tax review where needed, and documented exceptions or industry-specific rules.

Agreement matches actual working relationshipConfirm the written agreement describes how the relationship actually operates rather than relying on labels that conflict with real practices.Evidence to gather: Current agreement compared with scheduling, supervision, payment, equipment, expense, and project records.

Classification is reviewed when facts changeCreate a trigger to re-review recurring relationships when control, frequency, permanence, role, or business integration materially changes.Evidence to gather: Review date, owner, trigger criteria, and documentation of material relationship changes.

Review areas still open

Nature and degree of control over the work
Opportunity for profit or loss
Skill required for the work
Permanence of the working relationship
Work as part of an integrated unit of production
IRS behavioral control
IRS financial control
IRS type of relationship
State and local worker-classification rules
Agreement matches actual working relationship
Classification is reviewed when facts change

This checklist organizes facts and documentation. It does not determine whether a worker is an employee or independent contractor and is not legal, tax, payroll, or employment advice.

Official sources

U.S. Department of Labor: 2026 independent contractor proposed rulemaking ↗U.S. Department of Labor: 2026 proposed rulemaking FAQs ↗IRS: Independent contractor (self-employed) or employee? ↗IRS Publication 15-A (2026), Employer's Supplemental Tax Guide ↗

This checklist organizes facts and documentation. It does not determine whether a worker is an employee or independent contractor and is not legal, tax, payroll, or employment advice.

Classification first. Contractor operations second.

Once a relationship is appropriately classified, Kelvaro can keep onboarding, assignment context, approvals, payouts, reconciliation, and year-to-date records connected.

See contractor compliance workflows →

Free compliance workflow tool · reviewed September 9, 2026

Worker classification review checklist for 2026

Read the 2026 classification status →Misclassification guide

Current federal status

Review progress

0%0 of 11 review areas documented

Completion means you have reviewed and documented the area. It does not mean the worker qualifies as an independent contractor.

DOL 2026 proposed FLSA analysis

IRS federal employment-tax review

Jurisdiction and operating-reality checks

Federal tests are not the whole analysis. State and local rules can differ, and documents should match the way the relationship actually operates.

Review areas still open

Nature and degree of control over the work
Opportunity for profit or loss
Skill required for the work
Permanence of the working relationship
Work as part of an integrated unit of production
IRS behavioral control
IRS financial control
IRS type of relationship
State and local worker-classification rules
Agreement matches actual working relationship
Classification is reviewed when facts change

This checklist organizes facts and documentation. It does not determine whether a worker is an employee or independent contractor and is not legal, tax, payroll, or employment advice.

Official sources

This checklist organizes facts and documentation. It does not determine whether a worker is an employee or independent contractor and is not legal, tax, payroll, or employment advice.

Classification first. Contractor operations second.

Once a relationship is appropriately classified, Kelvaro can keep onboarding, assignment context, approvals, payouts, reconciliation, and year-to-date records connected.

See contractor compliance workflows →