Distinction between independent contractor and employee is generally based on what factor?

• A. Management classifications
• B. The overall value of the work
• C. Control over the cost and production of the work
• D. The experience of the worker

Answer: (C)

Who controls how the work is done is the main factor in distinguishing an independent contractor from an employee. When the worker controls the cost and production of the work—deciding the methods, tools, schedule, and who pays for materials and inputs—they’re typically functioning as an independent contractor because they set the terms and bear the production costs and risks. In contrast, if the employer directs the work, specifies how and when tasks are completed, provides the tools and materials, and handles supervision and payment, that arrangement aligns with an employee relationship.

From the choices, the factor about control over the cost and production of the work best captures the essential dynamics that reveal who truly governs the work process and who bears the related costs. Other considerations like management classifications, the overall value of the work, or the worker’s experience do not reliably indicate the employment relationship, since they can reflect status or skill without showing who controls how the work is performed.