What is the primary factor that determines whether someone is classified as an employee instead of an independent contractor?

The classification of a worker as an employee or an independent contractor primarily hinges on the control aspect of their working relationship. When assessing whether someone is an employee, the key factor is the degree of control the employer has over the worker’s performance of their job. This includes how much influence the employer has on the methods, means, and details of the job execution.

If the employer dictates not only the outcome of the work but also the way in which tasks are to be completed, this suggests an employee relationship. Independent contractors, on the other hand, typically enjoy more freedom in determining how to complete their work, which aligns with their classification as self-employed individuals responsible for their own business operations.

While factors like pay, the duration of the contract, and the nature of the relationship can contribute to the determination of a worker's status, they do not carry the same weight as the control aspect. In IRS guidelines, this control test is pivotal in distinguishing between independent contractors and employees, making it a critical point of focus for proper classification.