Are restaurant delivery drivers employees or independent contractors?
Updated October 20, 2026
For a restaurant's own delivery drivers, the tests usually point to employee, not independent contractor. If you set their shifts, tell them how to deliver, assign their orders and pay them by the hour, the IRS's control test points to employee. In California, the ABC test presumes a worker is an employee unless the business proves all three of its conditions, and delivery is hard to call "outside the usual course" of a restaurant that sells delivery. Calling a driver a contractor doesn't change what the law sees. If you want delivery without employing drivers, use a courier such as Uber Direct instead.
In short
- IRS: a worker is your employee if you can control what will be done and how. Evidence falls into three groups: behavioral, financial and type of relationship.
- Department of Labor: since May 1, 2025, its investigators don't apply the 2024 rule; a February 2026 proposal would replace it with a test built on control and opportunity for profit or loss.
- California: the ABC test (Labor Code §2775). The business must prove the worker is free from its control, does work outside the usual course of its business, and runs an independent business of the same kind.
- A real contractor gets no FLSA minimum wage or overtime, so you'd pay by the job and they'd carry their own costs. From 2026 you file Form 1099-NEC when you pay one $2,000 or more in a year.
- Got it wrong? The IRS has a fix: the Voluntary Classification Settlement Program (Form 8952).
How do I know if a delivery driver is an employee?
A US restaurant can face three tests. They overlap, but they're not the same.
| Test | Used for | The core question | What it looks at |
|---|---|---|---|
| IRS common-law test | Federal income tax withholding, Social Security, Medicare and unemployment tax | Can you control what will be done and how it will be done? | Behavioral control (instructions, training), financial control (pay method, expenses, tools), type of relationship (contracts, benefits, permanence, whether the work is central to your business) |
| Department of Labor (FLSA) | Minimum wage, overtime, tip rules | Is the worker economically dependent on you, or in business for themselves? | Investigators follow Fact Sheet #13 (2008) and opinion letter FLSA2019-6 (Field Assistance Bulletin 2025-1). A 2026 proposal names two core factors: control and opportunity for profit or loss |
| California ABC test (Labor Code §2775) | California wage law, unemployment insurance and wage orders | Presumed employee unless the business proves A, B and C | A: free from your control and direction, in contract and in fact. B: work outside the usual course of your business. C: customarily engaged in an independent trade or business of the same kind |
Other states use their own tests for wage law or unemployment insurance. Check yours.
Worked example: a typical pizzeria driver
Sam drives for a pizzeria four evenings a week. Here's how the facts line up.
| Fact about Sam's job | IRS group | Points to |
|---|---|---|
| The manager sets Sam's shifts (Thursday to Sunday, 5 to 10 pm) | Behavioral | Employee |
| Sam must use the restaurant's insulated bags and driver app, and follow its delivery steps | Behavioral | Employee |
| The restaurant assigns each order to Sam; Sam can't pick or refuse orders | Behavioral | Employee |
| Sam is paid by the hour plus mileage, not by the job | Financial | Employee |
| Sam has no other delivery customers and no delivery business of their own | Financial / relationship | Employee |
| The arrangement is open-ended, week after week | Relationship | Employee |
| Delivery is something the restaurant sells on its menu, with a delivery fee | Relationship; California test B | Employee |
| Sam uses their own car | Financial | Neutral on its own: many employees drive their own cars for work |
Every factor but one points to employee, and the one that doesn't is neutral. Under California's ABC test, failing any one of A, B or C is enough to make Sam an employee, and test B (work outside the usual course of the business) is hard to pass for a restaurant that sells delivery.
What would look different for a real contractor? A courier business that sets its own hours, takes jobs from many restaurants, can turn your jobs down, uses its own equipment and branding, invoices per delivery, and could make or lose money by how it runs. That's what a delivery company such as Uber Direct or DoorDash Drive offers: you buy a delivery from a business, not a driver's time.
What changes if a driver is an employee or a contractor?
| Employee | Independent contractor (if the tests are met) | |
|---|---|---|
| Minimum wage and overtime (FLSA) | Yes, for every hour, including waiting time | No |
| Mileage | Car costs can't cut pay below the minimum wage; California requires expense repayment | The contractor's own business cost |
| Tips | The employee's; employer may not keep them | Passed on as agreed; the FLSA tip rules are written for employees |
| Payroll taxes | You withhold and pay Social Security and Medicare (7.65% employer share) | None; the contractor pays self-employment tax |
| Year-end form | Form W-2 | Form 1099-NEC if you paid them $2,000 or more (payments after December 31, 2025; $600 before) |
| Workers' comp | Under your state's rules | Depends on your state's law; ask your insurer |
| Your insurance | Hired and non-owned auto covers your liability over the driver's own policy | Ask your insurer what applies; see delivery driver insurance |
What if I've been paying drivers as contractors?
Talk to an accountant or employment lawyer. The IRS describes three routes:
- Form SS-8. Either you or the worker can ask the IRS to decide a worker's status. It can take at least six months.
- Section 530 relief. If you had a reasonable basis for treating a worker as a contractor, filed all required 1099s, and haven't treated anyone in a substantially similar job as an employee, you may be relieved of federal employment taxes for that worker. It doesn't change the worker's actual status.
- Voluntary Classification Settlement Program (VCSP), Form 8952. Reclassify workers as employees going forward, with partial relief from federal employment taxes, if you're eligible.
If you classified an employee as a contractor without a reasonable basis, the IRS says you may be liable for that worker's employment taxes (Internal Revenue Code §3509). State wage and unemployment agencies apply their own laws as well.
Can I avoid employing drivers and still deliver my own orders?
Yes, two ways:
- Use a courier business. Uber Direct and DoorDash Drive deliver orders from your own website for a fee per delivery, with their couriers. Menuthere connects your own Uber Direct account (stores outside India); Uber bills you directly.
- Mix both. Employ a small core of drivers for the busy nights and send the overflow to a courier. See the hybrid model in in-house delivery for restaurants, and compare the costs in the own delivery cost calculator.
How Menuthere fits either set-up
- Your own drivers (Pro, $39 a month): add each driver with a name, phone and password; they use the Menuthere Delivery App on iPhone or Android; you assign each order; customers track the driver live. Menuthere works the same whether you employ the drivers or not, and it doesn't decide anyone's status.
- Couriers: connect your own Uber Direct account and book a courier per order, automatically or by tapping Book Uber courier.
- No per-driver or per-delivery fee from Menuthere.
What Menuthere doesn't do: payroll, 1099s, worker classification advice, or automatic assignment of orders to drivers. For pay set-up, see how to pay delivery drivers and delivery driver tips.
Run your own drivers, a courier, or both, with no per-delivery fee from us. then. Plans:.
More own-delivery guides: hiring drivers, job description template, driver pay and mileage, tips, insurance, delivery radius and zones, keeping food hot. The overview with costs: in-house delivery for restaurants.
Frequently asked questions
Can a restaurant pay its delivery drivers as 1099 independent contractors?
Only if the drivers really are independent under the tests that apply to you. For drivers whose shifts you set, whose orders you assign and whom you pay by the hour, the IRS control test points to employee, and California's ABC test presumes employee unless the business proves all three conditions.
Are pizza delivery drivers independent contractors?
Usually not when they drive for the pizzeria itself on its schedule, with its bags and its app, paid by the hour. Delivery is part of what a pizzeria sells, which makes California's test B, work outside the usual course of the business, hard to pass.
What is the ABC test for delivery drivers in California?
Under Labor Code section 2775, a worker is an employee unless the business shows the worker is free from its control and direction, does work outside the usual course of its business, and is customarily engaged in an independent trade or business of the same kind. Failing any one makes the worker an employee.
What is the Department of Labor's current independent contractor rule?
A 2024 rule is still on the books, but since May 1, 2025 the Department's investigators don't apply it. They follow Fact Sheet #13 and opinion letter FLSA2019-6. In February 2026 the Department proposed replacing the 2024 rule with a test built on two core factors, control and opportunity for profit or loss; comments closed on April 28, 2026.
When do I file a 1099-NEC for a delivery contractor?
For payments made after December 31, 2025, when you pay a contractor $2,000 or more in a year for services. Before that, the threshold was $600.
Sources (7)
- IRS, Independent contractor (self-employed) or employee?: https://www.irs.gov/businesses/small-businesses-self-employed/independent-contractor-self-employed-or-employee (last reviewed or updated 19 May 2026; read 20 Oct 2026): employee if "you can control what will be done and how it will be done"; behavioral, financial and type-of-relationship evidence; Form SS-8 ("may take at least six months"); liability for employment taxes under IRC §3509 without a reasonable basis; Section 530 relief conditions; VCSP, Form 8952.
- IRS, Form 1099-NEC & independent contractors: https://www.irs.gov/faqs/small-business-self-employed-other-business/form-1099-nec-independent-contractors/form-1099-nec-independent-contractors (page last reviewed or updated 16 Oct 2026; read 20 Oct 2026): "Report payments totaling $600 ($2,000 for payments made after December 31, 2025) or more during the calendar year."
- U.S. Department of Labor, Field Assistance Bulletin No. 2025-1 (May 1, 2025): https://www.dol.gov/sites/dolgov/files/WHD/fab/fab2025-1.pdf (PDF read 20 Oct 2026; text extracted locally): "WHD will no longer apply the 2024 Rule's analysis when determining employee versus independent contractor status in FLSA investigations. WHD will enforce the FLSA in accordance with Fact Sheet #13 (July 2008), and as further informed by FLSA2019-6".
- U.S. Department of Labor, Notice of Proposed Rule (RIN 1235-AA46): https://www.dol.gov/agencies/whd/flsa/misclassification/2026rulemaking (read 20 Oct 2026): NPRM announced February 26, 2026; "The NPRM's 60-day comment period closed at 11:59 pm ET on April 28, 2026"; proposes rescinding the 2024 rule; economic reality test with two core factors (control; opportunity for profit or loss). Federal Register document 2026-03962 (27 Feb 2026). No final rule found as of 20 Oct 2026.
- California Labor Code §2775: https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?sectionNum=2775.&lawCode=LAB (read in a browser 20 Oct 2026; "Added by Stats. 2020, Ch. 38, Sec. 2. (AB 2257) Effective September 4, 2020"): employee "unless the hiring entity demonstrates that all of the following conditions are satisfied: (A) … free from the control and direction … both under the contract … and in fact. (B) … outside the usual course of the hiring entity's business. (C) … customarily engaged in an independently established trade, occupation, or business of the same nature". Also California LWDA ABC test page: https://www.labor.ca.gov/employmentstatus/abctest/ (read 20 Oct 2026).
- 29 U.S.C. 203(m)(2)(B) and DOL Fact Sheet #15 (tips; read 20 Oct 2026); 29 CFR 785.15 (engaged to wait; read 20 Oct 2026); IRS Topic no. 751 (7.65%; read 20 Oct 2026, Wave 1); California Labor Code §2802 (read 20 Oct 2026, Wave 1).
- "Sam" is a made-up example; the factor table applies the IRS groups and California's §2775 text to it.