(1) As provided in 39-51-201 , MCA, the following two-part test is used to determine whether an individual is an independent contractor or an employee:

(a) whether an individual is and will continue to be free from control or direction over the performance of the services, both under contract and in fact; and

(b) whether an individual is engaged in an independently established trade, occupation, profession, or business.

(2) For purposes of this rule, "individual" means a worker who renders service in the course of an occupation, and "employing unit" means the individual or other legal entity as described in the definition of "employing unit" in 39-51-201 , MCA, that hired one or more individuals.

(3) To determine whether an independent contractor or employment relationship exists, the department may:

(a) review written contracts between the individual and the employing unit;

(b) interview the individual, co-workers, or the employing unit;

(c) obtain statements from third parties;

(d) examine the books and records of the employing unit;

(e) review filing status on income tax returns; and

(f) make any other investigation necessary to determine if an independent contractor relationship exists.

(4) After investigation, the department may issue an initial written determination on whether an individual is an independent contractor.  Any person or employing unit aggrieved by this initial determination may request investigation and a determination by the department's independent contractor central unit (ICCU) pursuant to ARM 24.11.203 and ARM Title 24, chapter 35, subchapters 2 and 3 within 10 days of notice of the initial determination.

(a) A party is considered to have been given notice on the date a written notice is personally delivered or three days after a written notice is mailed to the party.

(b) The time limits set forth above may be extended for good cause as provided in 39-51-2402 (4) , MCA.

(5) Thereafter, the process set out in ARM Title 24, chapter 35, subchapters 2 and 3 controls.