Which factor would qualify a person as an independent contractor?

Which factor would qualify a person as an independent contractor?

• A. Can make a profit or loss on work
• B. Works under direct supervision and receives benefits
• C. Has a fixed salary from a company
• D. Uses the company's equipment and systems

Answer: (A)

Profit or loss potential signals economic independence and control over the work. An independent contractor operates as a separate business, bidding jobs and taking on the risk that they might profit or lose money based on how the job is priced and managed. They’re not guaranteed a wage or benefits, and they often supply their own methods, materials, or process to complete the work. The other signals described—being under direct supervision and receiving benefits, having a fixed salary, or using the company’s equipment and systems—fit an employer-employee relationship, where the employer controls how the work is done, provides compensation and benefits, and supplies tools and resources. So, the ability to profit or incur a loss best indicates independent contractor status.

Profit or loss potential signals economic independence and control over the work. An independent contractor operates as a separate business, bidding jobs and taking on the risk that they might profit or lose money based on how the job is priced and managed. They’re not guaranteed a wage or benefits, and they often supply their own methods, materials, or process to complete the work. The other signals described—being under direct supervision and receiving benefits, having a fixed salary, or using the company’s equipment and systems—fit an employer-employee relationship, where the employer controls how the work is done, provides compensation and benefits, and supplies tools and resources. So, the ability to profit or incur a loss best indicates independent contractor status.