Rock the 2025 FPC Exam – Master Payroll Fundamentals with Confidence!

The Reasonable Basis Test is applied to situations where an employer has historically treated similar workers as Independent Contractors. This test allows employers to classify workers as independent contractors based on a consistent pattern of treatment for similar workers over time, reflecting a reasonable basis for classification.

This approach helps employers demonstrate that their treatment of these workers is consistent with prior classifications, which can be significant during audits or disputes regarding worker classification. By having established precedent in how they classify similar roles, employers can argue that their decision is grounded in a historical context rather than arbitrary choice.

In contrast, the other scenarios do not directly relate to historical treatment and do not provide a framework for establishing a reasonable basis for classification. For instance, unrelated tasks or strict contracts do not necessarily align with the consistent treatment of workers that the Reasonable Basis Test requires. Similarly, the new employee scenario does not have a historical precedent to support any specific classification.