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)

Independent contractor status rests on economic independence and control over how the work gets done. The key factor is the ability to profit or incur a loss from the work, which shows the worker bears the financial risk and has incentives to manage costs and methods themselves. This autonomy and risk-taking are what separate a contractor from an employee who would typically receive a guaranteed wage and be under direct supervision. Other options reflect an employer–employee arrangement: direct supervision with benefits implies a regular employment relationship, a fixed salary indicates steady payroll compensation, and using the company’s equipment and systems signals reliance on the employer’s resources. Therefore, being able to make a profit or loss is the best indicator of independent contractor status.