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Independent Contractor Test in Texas

Texas uses the common law direction or control test, applied through the Texas Workforce Commission's 20 factor Form C-8 guideline, for both the Payday Law and unemployment insurance; it does not use the ABC test.

Last checked . General information, not legal advice.

Texas at a glance

Test for wage and hour law
Common law (right to control) test, TWC Form C-8
The Payday rules adopt Form C-8 as the official guideline for deciding employment status.
ABC test for wage law
No
Test for unemployment insurance
Direction or control test (TWC Form C-8)
Service for wages is employment unless shown free from control or direction under the contract and in fact.
ABC test for unemployment
No

Sources

Last checked

The rules in Texas

Which test does Texas use to classify independent contractors under its wage and hour laws?

Test for wage and hour law in Texas: Common law (right to control) test, TWC Form C-8. The Payday rules adopt Form C-8 as the official guideline for deciding employment status.

Does Texas apply the ABC test under its wage and hour laws?

No. ABC test for wage law in Texas: no.

Which test does Texas use to classify independent contractors for unemployment insurance?

Test for unemployment insurance in Texas: Direction or control test (TWC Form C-8). Service for wages is employment unless shown free from control or direction under the contract and in fact.

Does Texas apply the ABC test for unemployment insurance?

No. ABC test for unemployment in Texas: no.

Where do the Texas independent contractor tests come from?

The rules above come from Tex. Lab. Code 201.041, 40 Tex. Admin. Code 815.134 and 40 Tex. Admin. Code 821.5. Each source is linked on this page. We last checked them in October 2026.

Good to know

Texas unemployment rules exclude qualifying marketplace contractors who use a digital network platform from employment, under 40 Tex. Admin. Code 815.134(b).

What this means in practice

Write down how the working relationship actually operates: who sets the hours, who supplies tools, whether the worker serves other clients and whether the work is part of the business's usual line of work. These facts drive every classification test, and a written independent contractor agreement helps only if it matches them.

Check each law separately. A worker can be a contractor under one statute and an employee under another, because wage laws, unemployment insurance, workers' compensation and tax rules may each use their own test. Federal law also applies its own tests alongside the state rules.

Misclassification can lead to back wages, unpaid unemployment contributions, interest and penalties. If a role is close to the line, read the statute and agency guidance for the state where the work is performed, or ask the state labor or unemployment agency how it applies its test.

General information, not legal advice. Laws change, and cities can add their own rules, so check the current statute before you rely on it.