Misclassification
Misclassification occurs when an employer incorrectly identifies an individual as an “independent contractor” rather than an employee.
With respect to Unemployment Insurance, New Mexico uses the “ABC test”, which is found in New Mexico statute, under NMSA 51-1-42(F)(5).
The "ABC" Test (3 parts)
The New Mexico statute defines a non-employee/contractor as one who established by a preponderance of the evidence that:
A. Such individual has been and will continue to be free from control or direction over the performance of such services both under his contract of service and in fact;
B. Such service is either outside the usual course of business for which such service is performed or that such service is performed outside of all the places of business of the enterprise for which such service is performed; and
C. Such individual is customarily engaged in an independently established trade, occupation, profession or business of the same nature as that involved in the contract of service. N.M. Stat. § 51-1-42(F)(5).
Additional Resources
“Myths About Misclassification”
New Mexico Department of Taxation & Revenue - Independent Contractors vs. Employees
Contact us
For more information contact a Tax Customer Service Agent at 1-877-664-6984, Monday through Friday, from 8:00 a.m. to 4:30 p.m. Misclassification and Unemployment Insurance tax-related questions may be submitted to uitax.support@dws.nm.gov.