North Carolina primarily uses a common-law test to classify gig workers as employees or independent contractors, focusing on behavioral control, financial control, and relationship type rather than ABC tests seen in states like California. Gig workers like rideshare or delivery drivers are typically deemed contractors unless factors show employee-like dependency, but misclassification risks penalties including back wages and taxes.​
Classification Factors
The state follows IRS guidelines with 20 common-law factors, such as right to direct work (employee indicator), investment in equipment (contractor favor), and permanency of relationship. For workers’ comp, gig workers qualify as contractors without coverage unless misclassified, with exemptions rare for casual or agricultural roles.​
Recent Legislative Efforts
Bills like S 326 and H 339 in 2025 proposed studying gig worker benefits and minimum wage hikes without reclassifying them as employees, but no major classification overhaul passed. Wage transparency and tipped wage changes advanced separately, leaving gig status unchanged.​
Implications for Gig Workers
Contractors handle their own taxes via 1099 forms and lack overtime or unemployment benefits, though federal DOL rules may apply in disputes. Businesses face audits for misclassification, prompting clear contracts outlining independence.​
SOURCES
[1](https://lrs.sog.unc.edu/billsum/s-326-2025-2026)
[2](https://eldrethlaw.com/blog/how-employment-and-workforce-regulations-in-2025-could-impact-small-business-owners-in-nc/)
[3](https://www.ayersandwhitlow.com/blog/are-freelancers-and-gig-workers-entitled-to-workers-comp-benefits-in-nc/)
[4](https://www.ncleg.gov/sessions/2025/bills/house/pdf/h339v1.pdf)
[5](https://www.postercompliance.com/blog/labor-law-compliance-for-gig-workers-what-employers-need-to-know/)
