Fundamental Payroll Certification (FPC) Practice Exam

The primary consideration in determining if a worker is classified as an employee or an independent contractor is the business’s control over the worker. This concept is fundamental in establishing the nature of the working relationship. When a business has significant control over how a worker performs tasks, the worker is likely to be classified as an employee. This includes the ability to dictate the means and methods of work, which implies a more dependent relationship.

Independent contractors, on the other hand, typically have more autonomy, allowing them to dictate how they complete their work. The level of control exercised by the business is pivotal in differentiating between the two classifications, as it encompasses various elements such as how the work is performed, the tools used, and the result of the work.

While other factors, such as the duration of employment, a worker's benefits entitlement, and a worker's age, may influence the classification in a broader sense, they are not the primary determinant. Control remains the central focus in classification determinations, reflecting the degree of independence or dependence in the working relationship.