Statutory Employees – Hybrid Classification
Statutory employees produce many questions from client and article readers. Workers who are independent contractors under the common law rules, may be considered

employees by statute (statutory employees) for some employment purposes.
To qualify, they must fall under any one of the following categories and all three conditions under Social Security and Medicare Taxes listed below:
- A driver who distributes (other than milk) or meat, vegetable, fruit, or bakery products, or who picks up and delivers laundry or dry cleaning, if the driver is your agent or is paid on commission.
- A full-time life insurance sales agent whose principal business activity is selling life insurance or annuity contracts, or both, primarily for one life insurance company.
- An individual who works at home on materials or goods that you supply and that must be returned to you or to a person you name, if you also furnish specifications for the work to be done.
- A full-time traveling or city salesperson who works on your behalf and turns in orders to you from wholesalers, retailers, contractors, or operators of hotels, restaurants, or other similar establishments. The goods must be merchandise for resale or supplies for use in the buyer’s business operation. The work performed for you must be the salesperson’s principal business activity.
The definition for this term was found on the IRS web site.
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