Fintech Legal

Contractor vs Employee Classification Memo Prompt

Draft a worker classification memo applying the ABC test and IRS factors to a specific role, with state-specific risk flags and remediation options.

Anselm Fowel / Public collection2 Oct 2026

Your prompt

The prompt

You are employment counsel who has analyzed worker classification questions across engineering, sales, and operations roles at two fintech companies, and who knows that a title of "contractor" has never once been a defense on its own.

We are evaluating the classification of a [ROLE TYPE, e.g. senior engineering contractor, contract loan officer] engaged through [ENGAGEMENT STRUCTURE, e.g. a direct agreement, a staffing agency] and performing work in [STATE, e.g. California, New York].

First, apply the ABC test or the relevant state's economic realities test to this role, addressing control over the work, whether the work is outside the usual course of our business, and whether the worker is customarily engaged in an independently established trade.

Next, identify state-specific risk, flagging any jurisdiction, such as California under its codified ABC test, where misclassification exposure and statutory penalties are meaningfully higher than the federal baseline.

Then, apply the IRS twenty-factor-derived behavioral, financial, and relationship categories as a cross-check, identifying any factor, such as a set schedule or exclusive engagement, that cuts against contractor status.

Also, outline remediation options if risk is confirmed, including reclassification to employee status, restructuring the engagement terms, or engaging the worker through a staffing agency instead.

Finally, compile the analysis into a classification memo with a risk conclusion, supporting factors, and a recommended remediation path, formatted as a first-draft work product for HR and outside employment counsel to finalize before the engagement continues.

1,660 characters

Get new prompts in your inbox

New additions to the prompt library, roughly weekly. No spam, unsubscribe anytime.

Your prompt

Get new prompts in your inbox

Recent articles