Illinois: employee or independent contractor?
The test depends on which law you're dealing with. A worker can be a contractor for one law and an employee for another.
| Law | Test | Statute |
|---|---|---|
| Unemployment insurance | ABC | 820 ILCS 405/212 |
| Wage and hour / wage payment | ABC (Wage Payment and Collection Act); ABC with a sole-proprietor alternative for construction (Employee Classification Act) | 820 ILCS 115/2; 820 ILCS 185/10 |
| Federal income tax, FICA, FUTA | IRS common-law test | IRS |
| Federal minimum wage and overtime | Economic reality test (FLSA) | DOL |
The ABC test
Under Illinois's unemployment law, a worker is an employee unless all three parts are met:
UI: (a) free from control or direction over the performance of such services, both under his contract of service and in fact; (b) service is either outside the usual course of the business for which such service is performed or performed outside of all the places of business of the enterprise; (c) engaged in an independently established trade, occupation, profession, or business. Wage Payment Act: (1) free from control and direction over the performance of his work; (2) work outside the usual course of business or outside all of the places of business of the employer, unless the employer is in the business of contracting with third parties for the placement of employees; (3) in an independently established trade, occupation, profession or business.
Details and exceptions
- effective_date is the DOL table baseline (in effect on or before 2023-01-01); the enactment date was not checked.
- The Employee Classification Act covers construction contractors; a worker can also be a legitimate sole proprietor or partnership under 820 ILCS 185/10(c).
- Workers' comp test not checked in this pass (Business insurance lane).
Law: 820 ILCS 405/212
Running payroll in Illinois?
Recent changes
Last verified against the official source on October 8, 2026.
No changes recorded since we started tracking this page.
Sources
- Illinois General Assembly (Illinois Compiled Statutes) · data as of October 8, 2026 · last checked October 8, 2026
We copy figures from official sources and re-check them against the source before every update. See our methodology. This is general information, not legal advice.