DOL uses an economic-realities test under the FLSA, codified in the 2024 Final Rule at 29 CFR Part 795
Fact Check: Independent Contractor Classification by State: Federal Tests, State ABC Rules, and 1099 Risk
Summary
This check verifies the research's worker-classification framework. Broad wage/payment ABC is framed around California, Massachusetts, and New Jersey; Vermont and Connecticut are not described as broad wage-hour ABC states; Illinois is described as strict for construction plus UI; and the federal DOL posture includes the February 2026 proposed rescission.
This fact check focuses on the claims most likely to be quoted or acted on by employers. State tables remain source-linked and should be treated as maintenance-sensitive.
Statutory / regulatory
2 claims
IRS uses common-law right-to-control categories for federal employment tax
- Source (primary)
- https://www.irs.gov/taxtopics/tc762
- Source (secondary)
- https://www.irs.gov/publications/p15a
- Verified
- May 27, 2026
Current-law posture
1 claim
DOL is not applying the 2024 rule in current enforcement, but the 2024 rule remains operative unless rescinded
- Source (primary)
- https://www.dol.gov/agencies/whd/flsa/misclassification/rulemaking
- Source (secondary)
- https://www.govinfo.gov/content/pkg/FR-2026-02-27/pdf/2026-03962.pdf
- Verified
- May 27, 2026
- Notes
DOL announced the proposed rescission on February 26, 2026; the Federal Register publication is 91 Fed. Reg. 9932, February 27, 2026; comments were due April 28, 2026.
State-law classification
4 claims
California applies broad ABC under Cal. Lab. Code §2775
- Source (primary)
- https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?sectionNum=2775.&lawCode=LAB
- Source (secondary)
- https://www.dir.ca.gov/dlse/faq_independentcontractor.htm
- Verified
- May 27, 2026
Massachusetts applies broad ABC under M.G.L. c. 149 §148B
- Source (primary)
- https://malegislature.gov/Laws/GeneralLaws/PartI/TitleXXI/Chapter149/Section148B
- Source (secondary)
- https://www.mass.gov/info-details/massachusetts-law-about-independent-contractors
- Verified
- May 27, 2026
New Jersey applies ABC across unemployment, wage payment, and wage-hour claims
- Source (primary)
- https://www.nj.gov/labor/ea/audit/independent-contractor-vs-employees/
- Source (secondary)
- https://law.justia.com/cases/new-jersey/supreme-court/2015/a-70-12.html
- Verified
- May 27, 2026
- Notes
Hargrove v. Sleepy's extended ABC to New Jersey Wage Payment Law and Wage and Hour Law claims.
Illinois has construction-specific ABC and ABC for unemployment
- Source (primary)
- https://www.ilga.gov/legislation/ilcs/ilcs3.asp?ActID=2898
- Source (secondary)
- https://www.ilga.gov/legislation/ilcs/ilcs4.asp?DocName=082004050HArt.+II&ActID=590
- Verified
- May 27, 2026
Current state regulation
1 claim
New Jersey adopted final ABC regulations filed May 5, 2026 and operative October 1, 2026
- Source (primary)
- https://www.nj.gov/labor/lwdhome/press/2026/20260505_ABC.shtml
- Source (secondary)
- https://www.nj.gov/labor/forms_pdfs/legal/2026/mw_abc_test_adoption.pdf
- Verified
- May 27, 2026
Correction
1 claim
Vermont and Connecticut are ABC unemployment states, not broad general wage/payment ABC states
- Source (primary)
- https://legislature.vermont.gov/statutes/section/21/017/01301
- Source (secondary)
- https://www.cga.ct.gov/current/pub/chap_567.htm
- Verified
- May 27, 2026
Legal precedent
3 claims
Dynamex adopted ABC for California wage-order claims
- Source (primary)
- https://scocal.stanford.edu/opinion/dynamex-operations-west-inc-v-superior-court-34743
- Verified
- May 27, 2026
Castellanos upheld California Prop 22
- Source (primary)
- https://law.justia.com/cases/california/supreme-court/2024/s279622.html
- Verified
- May 27, 2026
East Bay Drywall reinforced New Jersey employer burden under ABC
- Source (primary)
- https://law.justia.com/cases/new-jersey/supreme-court/2022/a-7-21.html
- Verified
- May 27, 2026
Sources
21 unique sources cited across the report — click to audit any claim directly against its evidence.
- 1.https://www.federalregister.gov/documents/2024/01/10/2024-00067/employee-or-independent-contractor-classification-under-the-fair-labor-standards-act
- 2.https://www.ecfr.gov/current/title-29/subtitle-B/chapter-V/subchapter-A/part-795
- 3.https://www.dol.gov/agencies/whd/flsa/misclassification/rulemaking
- 4.https://www.govinfo.gov/content/pkg/FR-2026-02-27/pdf/2026-03962.pdf
- 5.https://www.irs.gov/taxtopics/tc762
- 6.https://www.irs.gov/publications/p15a
- 7.https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?sectionNum=2775.&lawCode=LAB
- 8.https://www.dir.ca.gov/dlse/faq_independentcontractor.htm
- 9.https://malegislature.gov/Laws/GeneralLaws/PartI/TitleXXI/Chapter149/Section148B
- 10.https://www.mass.gov/info-details/massachusetts-law-about-independent-contractors
- 11.https://www.nj.gov/labor/ea/audit/independent-contractor-vs-employees/
- 12.https://law.justia.com/cases/new-jersey/supreme-court/2015/a-70-12.html
- 13.https://www.nj.gov/labor/lwdhome/press/2026/20260505_ABC.shtml
- 14.https://www.nj.gov/labor/forms_pdfs/legal/2026/mw_abc_test_adoption.pdf
- 15.https://legislature.vermont.gov/statutes/section/21/017/01301
- 16.https://www.cga.ct.gov/current/pub/chap_567.htm
- 17.https://www.ilga.gov/legislation/ilcs/ilcs3.asp?ActID=2898
- 18.https://www.ilga.gov/legislation/ilcs/ilcs4.asp?DocName=082004050HArt.+II&ActID=590
- 19.https://scocal.stanford.edu/opinion/dynamex-operations-west-inc-v-superior-court-34743
- 20.https://law.justia.com/cases/california/supreme-court/2024/s279622.html
- 21.https://law.justia.com/cases/new-jersey/supreme-court/2022/a-7-21.html
Check our work
Every claim above links to the source we used. Open any source to compare the wording here with the underlying rule, guidance, court opinion, or product behavior.
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