Which statement describes the criteria used to determine whether a worker is an independent contractor?

• A. Behavioral: Does the company control or have the right to control what the worker does and how the worker does the job; Financial: Are the business aspects of the worker's job controlled by the payer?; Type of Relationship: Are there written contracts or employee-type benefits.
• B. Hours worked and location.
• C. Education level.
• D. Salary and vacation time.

Answer: (A)

Determining independent contractor status rests on three ways a working relationship is governed: behavioral control, financial control, and the type of relationship. Behavioral control looks at who dictates how the work is done—the methods, schedule, and day-to-day activities. If the payer decides when and how the work happens, and directs the worker on the process, that leans toward an employee relationship. Financial control asks who controls the business aspects of the job—such as expenses, tools, invoicing, and how the worker gets paid. When the worker operates with significant control over these financial aspects and runs their own business risks, independence is more likely. Type of relationship considers how the relationship is structured—whether there are written contracts and benefits that resemble employment, which can indicate an employer-employee arrangement rather than a true contractor.

Hours worked, location, or the worker’s education level aren’t determining factors in this assessment. Salary and vacation time are typically associated with employees, not independent contractors. So the best description of the criteria is the combination of behavioral control, financial control, and the nature of the relationship.