Final answer:
The distinction is important because federal employment laws do not cover independent contractors (option a), leaving them without the same protections and benefits as employees.
Step-by-step explanation:
The distinction made under agency law between employee and independent-contractor status is important because federal employment laws a. do not cover employees who qualify as independent contractors. This means that independent contractors do not receive the same protections and benefits as employees under federal employment laws. For example, they are not entitled to minimum wage, overtime pay, or benefits like health insurance and retirement plans.
Additionally, independent contractors have more flexibility and control over their work compared to employees. They have the freedom to set their own hours, choose their clients or projects, and work for multiple employers. However, they are also responsible for paying their own taxes and managing their business expenses.
In contrast, employees have a closer and more formal relationship with their employers. They work under the control and direction of the employer, and the employer is responsible for withholding income taxes, providing benefits, and complying with employment laws.