Ch. 5 - Employee vs. Contractor

Question 1

Criteria for Employee Vs. Contractor

Answer 1

1. Control
2. Ownership of Tools
3. Chance of Profit/Risk of Loss
4. Integration
5. Specific Results
6. Intent

Question 2

Criteria for Employee Vs. Contractor - Control

Answer 2

who has right to determine time, place, and manner of work

Question 3

Criteria for Employee Vs. Contractor - Ownership of Tools

Answer 3

who supplies the tools necessary to do the work

Question 4

Criteria for Employee Vs. Contractor - Chance of Profit/Risk of Loss

Answer 4

• contractors typically have a greater chance of increasing profit / incurring a loss
• employees typically have a set wage

Question 5

Criteria for Employee Vs. Contractor - Integration

Answer 5

from the point of view of the individual:

1. how much income is derived from the entity, and
2. can the individual work for other entities

Question 6

Criteria for Employee Vs. Contractor - Specific Results

Answer 6

• employees are hired on an on-going basis

- contractors are hired for a specific project

Question 7

Criteria for Employee Vs. Contractor - Intent

Answer 7

1. was it a contract OF service (employee), or

2. was it a contract FOR service (contractor)