Question

One indicia of employee (rather than independent contractor) status is when the individual performing the services is paid based on time spent (rather than tasks performed).

a. True
b. False

Answer 1

The statement is true; individuals are generally considered employees when they are paid based on the time spent working rather than for completing specific tasks. This contrasts with independent contractors who are paid per project or task completion.

Step-by-step explanation:

The statement provided is true. One indicator of an individual being an employee, as opposed to an independent contractor, is indeed when compensation is based on the time spent working rather than the specific tasks performed. This can be observed in factory settings where workers may be required to clock in and clock out, showcasing that their wages are tied to the hours they work. Conversely, independent contractors are typically paid per project or based on task completion, which allows them more control over how they manage their time to complete the work.

In scenarios where wages increase, such as when the wage rises to $24 an hour, companies may opt to invest in physical capital equipment and increase productivity, which might result in requiring fewer employees. However, the fundamental distinction between the payment structures of employees and independent contractors remains as a significant factor in classifying labor status.