Wisconsin Remote Work Laws 2026

Wisconsin’s Classification Framework

Wisconsin applies different tests for worker classification depending on the purpose:

• Workers’ Compensation: Nine-part test under Wis. Stat. § 102.07(8)
• Unemployment Insurance: Two-part test under Wis. Stat. § 108.02(12)
• Wage and Hour Laws: Definitions under Wis. Stat. §§ 103.001 and 109.01
• Federal Tax Purposes: IRS common law test

Critical Note: A worker may be classified differently under different laws. An individual classified as an independent contractor for one purpose may be considered an employee for another purpose.

Statutory Authority: Various Wisconsin Statutes as listed above
Official Guidance: https://dwd.wisconsin.gov/worker-classification/

A. Workers’ Compensation Classification (Nine-Part Test)

According to Wis. Stat. § 102.07(8), to be considered an independent contractor rather than an employee for workers’ compensation purposes, an individual must meet and maintain ALL nine of the following requirements.

Statutory Authority: Wis. Stat. § 102.07(8)
Official Resource: https://dwd.wisconsin.gov/worker-classification/wc/

⚠️ CRITICAL: Failing to meet even ONE of the nine requirements results in employee classification for workers’ compensation purposes. This is an all-or-nothing test.

Requirement 1: Separate Business

General Description: The individual maintains a separate business with his or her own office, equipment, materials, and other facilities.

What This May Include (based on official guidance):

• Maintaining some space that resembles an office or facility
• Choosing the place to perform services
• Using materials or equipment that are the worker’s own

Illustrative Scenario (For General Understanding Only):

Scenario: A software developer performs services from a dedicated home office space with their own computer equipment, software licenses, and office supplies. They maintain this office space regardless of who they are providing services for.

General Observations: This scenario may share some characteristics with situations where Requirement 1 has been found satisfied, such as maintaining a dedicated workspace and owning work equipment. However:

• Actual determination requires analysis of all facts
• A home office may or may not satisfy the “separate business” requirement depending on circumstances
• The requirement focuses on whether the space and equipment are truly independent of any particular client

⚠️ This is not a determination. Each case depends on complete factual analysis by Wisconsin Worker’s Compensation Division.

Requirement 2: Federal Employer Identification Number (FEIN)

General Description: The individual has obtained a Federal Employer Identification Number from the IRS or has filed business or self-employment income tax returns based on the work in the previous year.

What This Requires:

• Obtaining FEIN from IRS, OR
• Filing business tax returns (Schedule C or similar) for prior year

Important Note: According to Wisconsin DWD, a Social Security Number cannot be substituted for a FEIN and does not meet this requirement.

Illustrative Scenario (For General Understanding Only):

Scenario: A graphic designer obtained an FEIN when they started their business and files Schedule C with their tax returns showing income from multiple clients.

General Observations: This scenario may satisfy Requirement 2 as it demonstrates both obtaining an FEIN and filing business tax returns. However:

• The requirement must be maintained continuously
• First-year contractors who have not yet filed business returns for the previous year may face challenges
• The existence of an FEIN alone is not sufficient if business tax returns are not filed

⚠️ This is not a determination. Consult Wisconsin Worker’s Compensation Division or tax professional for guidance.

Requirement 3: Operates Under Contracts

General Description: The individual operates under contracts to perform specific services or work for specific amounts of money and under which the independent contractor controls the means of performing the services or work.

Key Elements (based on official guidance):

• Contracts for specific services or work
• Specific dollar amounts stated
• Contractor controls how work is performed

Illustrative Scenario (For General Understanding Only):

Scenario: A consultant enters into written agreements with each client specifying the project deliverables, timeline, and total fee. The consultant determines their own work methods, schedule, and approach to completing the deliverables.

General Observations: This scenario may share characteristics associated with independent contractor relationships under Requirement 3:

• Written contracts with specific terms
• Fixed project fees rather than hourly wages
• Control over methods of performance

However, actual determination depends on factors such as:

• Whether contracts truly specify outcomes rather than methods
• Degree of actual control exercised
• Whether compensation structure reflects entrepreneurial risk

⚠️ This is not a determination. Classification requires evaluation by legal counsel familiar with Wisconsin law.

Requirement 4: Incurs Main Expenses

General Description: The individual incurs the main expenses related to the service or work that he or she performs under contract.

What This May Include (based on guidance):

• Costs of materials and supplies
• Equipment expenses
• Insurance costs
• Marketing and advertising expenses
• Professional fees

Analysis Framework: The evaluation typically involves:

1. Identifying all expenses related to the work
2. Determining which party bears each expense
3. Assessing whether the worker incurs the “main” expenses

Illustrative Scenario (For General Understanding Only):

Scenario: A freelance photographer provides their own camera equipment (worth $15,000), editing software subscriptions, transportation to shoots, liability insurance, and marketing costs. The client only provides the shoot location.

General Observations: This scenario may indicate that the photographer incurs main expenses. However:

• The requirement focuses on expenses related to the specific services being performed
• Some expenses may be reimbursed while still being “incurred” by the worker
• The magnitude and nature of expenses matter

⚠️ This is not a determination. Specific situations should be evaluated with legal counsel.

Requirement 5: Responsible for Satisfactory Performance

General Description: The individual is responsible for satisfactory performance of work under the contract.

What This May Mean (based on official guidance):

• Worker must correct unsatisfactory work at their own expense
• Worker bears risk of not meeting contract requirements
• No payment or reduced payment for unsatisfactory work

Illustrative Scenario (For General Understanding Only):

Scenario: A web developer contracts to build a website for a fixed fee. If the client is not satisfied with the initial design, the developer must revise it at no additional charge until the client approves. If the developer fails to complete the project satisfactorily, they do not receive payment.

General Observations: This scenario may demonstrate responsibility for satisfactory performance because:

• Developer bears cost of revisions
• Payment contingent on satisfactory completion
• Risk of non-payment for poor performance

However, determination depends on:

• What “satisfactory” means under the contract
• Whether standards are objective or subjective
• Actual practice in similar arrangements

⚠️ This is not a determination. Consult legal counsel for analysis of specific contracts.

Requirement 6: Paid Per Contract or By Commission

General Description: The individual is paid per contract, per job, by commission, or by competitive bid rather than on a salary, hourly, or piece-work basis.

Payment Methods That May Satisfy This Requirement:

• Fixed project fees
• Per-job payments
• Commission-based compensation
• Competitive bid awards

Payment Methods That May Not Satisfy This Requirement:

• Hourly wages
• Salary
• Piece-rate or per-unit payments

Illustrative Scenario (For General Understanding Only):

Scenario A: A contractor bids $5,000 to complete a specific construction project. Whether the project takes 40 hours or 80 hours, the payment remains $5,000.

Scenario B: A worker is paid $25 per hour for work performed, regardless of the specific projects or tasks completed.

General Observations:

• Scenario A may satisfy Requirement 6 (per-job payment)
• Scenario B likely does not satisfy Requirement 6 (hourly payment)

However, the line between acceptable and unacceptable payment methods can be nuanced:

• Per-unit pricing may be problematic if it effectively equals hourly pay
• Fixed fees calculated based on estimated hours may be scrutinized

⚠️ These are not determinations. Payment structure should be reviewed with legal counsel.

Requirement 7: Subject to Profit or Loss

General Description: The individual may realize a profit or suffer a loss under contracts to perform services or work.

What This Typically Requires:

• Real possibility of earning more or less based on business decisions
• Variable costs that can be managed
• Business risk that affects bottom line

Factors That May Be Considered:

• Whether worker can increase profit through efficiency
• Whether poor business decisions result in losses
• Whether fixed costs exist regardless of work volume

Illustrative Scenario (For General Understanding Only):

Scenario: A delivery contractor agrees to deliver packages in a territory for $2,000 per month. They must provide their own vehicle, fuel, insurance, and maintenance. If they complete deliveries efficiently using less fuel and fewer vehicle repairs, they keep more profit. If their vehicle breaks down or they’re inefficient, their costs may exceed $2,000.

General Observations: This scenario may demonstrate profit/loss potential because:

• Fixed income with variable costs
• Efficiency affects profitability
• Real risk of expenses exceeding income

However, determination depends on:

• Magnitude of potential profit or loss
• Whether profit/loss is realistic or theoretical
• Duration of potential profit/loss periods

⚠️ This is not a determination. Each situation requires individualized analysis.

Requirement 8: Recurring Business Liabilities or Obligations

General Description: The individual has recurring business liabilities or obligations.

What This May Include (based on guidance):

• Office lease payments
• Professional liability insurance premiums
• Business license fees
• Equipment lease or loan payments
• Costs that continue even during periods without work

Key Concept: These are expenses the worker incurs even when not performing work for a particular client.

Illustrative Scenario (For General Understanding Only):

Scenario: An IT consultant maintains professional liability insurance ($2,000/year), pays for office space ($800/month), maintains software licenses ($500/month), and has business equipment loans ($300/month). These costs continue whether or not the consultant has active projects.

General Observations: This scenario may satisfy Requirement 8 because:

• Multiple recurring fixed costs
• Costs continue during periods without work
• Significant ongoing financial obligations

However, actual evaluation depends on:

• Amount and nature of recurring costs
• Whether costs are truly independent of any particular client
• Whether expenses are realistic for the type of work

⚠️ This is not a determination. Consult legal and accounting professionals for evaluation.

Requirement 9: Success or Failure Depends on Business Receipts vs. Expenditures

General Description: The success or failure of the independent contractor’s business depends on the relationship of business receipts to expenditures.

What This Typically Means:

• The worker is in a position to succeed or fail based on business performance
• There is a realistic prospect of time periods with expenditures but not receipts
• The worker faces genuine entrepreneurial risk

Illustrative Scenario (For General Understanding Only):

Scenario: A marketing consultant invests in advertising, maintains business infrastructure, and sometimes experiences months with high expenses but few clients, followed by months with strong revenue. The consultant’s business viability depends on managing this variability and ensuring receipts exceed expenditures over time.

General Observations: This scenario may demonstrate entrepreneurial risk because:

• Variable income and expenses
• Possibility of loss periods
• Long-term viability depends on business management

However, determination requires analysis of:

• Realistic vs. theoretical risk
• Magnitude of potential failures
• Time periods being evaluated

⚠️ This is not a determination. Professional guidance necessary for classification decisions.

Remote Work Considerations for Workers’ Compensation Classification

For remote workers, classification analysis may involve additional complexities:

• Physical work location vs. business location
• Nature of work relationship in virtual environment
• Level of control and independence in remote setting
• How the nine-part test applies to home-based work

⚠️ Important: Working remotely does not change the legal test but may affect how the test is applied. Classification of remote workers should be reviewed with legal counsel familiar with Wisconsin law and your specific circumstances.

Potential Consequences of Misclassification (Workers’ Compensation)

According to Wisconsin DWD and workers’ compensation statutes, potential consequences of misclassification may include:

For Employers:

• Penalties of double the insurance premiums that should have been paid, or $750, whichever is greater
• Possible cease operations orders until coverage is obtained
• Personal liability to reimburse the Uninsured Employers Fund for any benefits paid
• Possible criminal penalties in cases of intentional misclassification
• Exposure to tort liability from uninsured workers

For Workers:

• May affect access to workers’ compensation benefits if injured
• May affect unemployment insurance eligibility
• May create tax complications

Source: Wisconsin Statutes §§ 102.28, 102.82, 102.85; Wisconsin DWD – https://dwd.wisconsin.gov/wc/

Note: The specific consequences depend on many factors. This is general information only. Consult legal counsel to understand potential exposure in your situation.

B. Unemployment Insurance Classification (Two-Part Test)

For unemployment insurance purposes, Wisconsin uses a different test found in Wis. Stat. § 108.02(12).

Statutory Authority: Wis. Stat. § 108.02(12)(bm)
Official Resource: https://dwd.wisconsin.gov/worker-classification/ui/

General Framework: According to Wisconsin law, there is a presumption that a worker performing services for pay is an employee. To overcome this presumption and be classified as an independent contractor, the worker must satisfy BOTH parts of a two-part test:

Part 1: Free from Control or Direction The worker must be free from the employer’s control or direction in the performance of the service both under contract and in fact.

Part 2: Six of Nine Conditions The worker must meet at least six of nine specified conditions.

⚠️ Critical: Both parts must be satisfied. Meeting one part but not the other results in employee classification.

Part 1: Free from Control or Direction

General Description (from statute): The individual must be free from control or direction over the performance of services both under the contract and in fact.

Factors That May Be Considered:

• Who sets the work schedule
• Who determines methods and means of work
• Who provides instructions or training
• Whether worker can refuse assignments
• Whether worker can work for others simultaneously

Illustrative Scenario (For General Understanding Only):

Scenario A: A bookkeeper sets their own hours, uses their own methods and software, works for multiple clients, and determines how to complete accounting tasks.

Scenario B: A worker must be available during specific hours set by the company, follows company procedures, receives ongoing supervision, and works primarily for one company.

General Observations:

• Scenario A may demonstrate freedom from control
• Scenario B likely does not demonstrate freedom from control

However, determination depends on complete factual analysis including both contractual terms and actual practice.

⚠️ These are not determinations. Consult Wisconsin UI division or legal counsel for guidance.

Part 2: Six of Nine Conditions

The worker must meet at least six of the following nine conditions:

1. Maintains a separate business location
2. Performs services in an independently established trade, occupation, profession, or business
3. Is responsible for filing Schedule C or equivalent business/self-employment tax returns
4. Performs services that are outside the usual course of business of the employer
5. Is responsible for obtaining necessary business licenses
6. Maintains comprehensive general liability insurance
7. Has recurring business liabilities or obligations
8. Has right to hire assistants or employees
9. Has right to perform services for other entities

Note: This is a summary only. Each condition has specific requirements and interpretations. See Wisconsin DWD guidance for complete details.

Official Resource: https://dwd.wisconsin.gov/worker-classification/ui/allothers/

C. Wage and Hour Classification

For minimum wage and overtime purposes, Wisconsin law defines employees in several ways depending on the specific statute.

Key Definitions:

1. Wis. Stat. § 103.001(5) (Employment Regulations): “Employee” means any person who may be required or directed by any employer in consideration of direct or indirect gain or profit to engage in any employment.

2. Wis. Stat. § 109.01(1r) (Wage Payment Laws): “Employee” means any person employed by an employer, with certain exceptions for corporate officers, LLC members, partners, independent contractors, and managerial personnel.

General Approach: The Labor Standards Bureau presumes a worker is an employee unless the worker meets one of the specific statutory exceptions.

Source: Wisconsin DWD Labor Standards – https://dwd.wisconsin.gov/worker-classification/er/laborstandards/

How to Seek Classification Guidance

Classification questions should be addressed through:

Wisconsin Department of Workforce Development:

• Workers’ Compensation: (608) 266-1340
• Unemployment Insurance: (608) 266-3131
• Labor Standards: (608) 266-6860
• Online Resources: https://dwd.wisconsin.gov/worker-classification/

Professional Advisors:

• Employment attorney licensed in Wisconsin
• Tax professional familiar with Wisconsin and federal law
• HR consultant with Wisconsin expertise

IRS (for federal tax classification):

• Form SS-8 process for determination requests
• https://www.irs.gov/businesses/small-businesses-self-employed/independent-contractor-self-employed-or-employee

⚠️ CRITICAL REMINDER: Worker classification is a legal determination that should be made with professional guidance.