Which of the following statements is true regarding independent contractors?
A) An independent contractor is a legal employee of the company which hired him/her.
B) Using an independent contractor increases the employer's exposure to laws and regulations governing the employment relationship.
C) Using an independent contractor frees an employer from the tax withholding and tax payment obligations it has for its employees.
D) Using an independent contractor substantially increases the right of the employer to control the contractor.

Question

Quizplus · Accepted Answer

When using an independent contractor, the employer is not responsible for tax withholding and tax payment obligations, as the independent contractor is responsible for handling his/her own taxes. Option A is incorrect because an independent contractor is not a legal employee of the company, but rather a self-employed individual who provides services for the company. Option B is incorrect because using an independent contractor typically decreases the employer's exposure to employment laws and regulations. Option D is incorrect because the employer's right to control an independent contractor is generally limited compared to the level of control an employer can exert over an employee.

Which of the Following Statements Is True Regarding Independent Contractors