Which of the following best reflects the factors used to determine whether a worker is an independent contractor?

• A. Behavioral, Financial, and Type of Relationship criteria.
• B. Geographic location and age.
• C. Salary and vacation time.
• D. Tenure and stock options.

Answer: (A)

Determining if a worker is an independent contractor centers on how much control the firm has over the work and the nature of the relationship. The best answer uses three limiting criteria: Behavioral control, Financial control, and Type of relationship.

Behavioral control looks at whether the company dictates how the work is done—training, instructions, and supervision can indicate an employee relationship because the firm retains more control over daily activities. Financial control considers how the worker is compensated and whether they have meaningful financial risk or opportunity for profit—things like investing in tools, unreimbursed expenses, and the ability to work with others or set their own rates. Type of relationship examines the terms of the engagement—written contracts, benefits, and whether the relationship is intended to be ongoing or permanent, suggesting an employee rather than an independent contractor.

The other options don’t provide this framework. Geographic location and age aren’t relevant to classification. Salary and vacation time are compensation and benefits elements, not the multifactored test used to determine status. Tenure and stock options may hint at employment status but don’t constitute the recognized three-factor framework.

So the answer that aligns with the standard approach—the three criteria of Behavioral control, Financial control, and Type of relationship—is the best choice.