Final answer:
To assess if a worker is an employee or self-employed, the level of control over work, financial arrangements, and the nature of the relationship with the employer or clients are key factors considered.
Step-by-step explanation:
To determine whether a worker is an employee versus self-employed, three key factors are typically used:
- Control: Employee status is often characterized by the employer's control over the work being done, including when, where, and how the work is completed. In contrast, self-employed individuals usually have more freedom to set their own schedules and methods of work.
- Financial: Employees are typically guaranteed a regular wage for an agreed upon amount of time or number of hours worked and may benefit from company-provided tools or materials. On the other hand, self-employed individuals often supply their own materials, and their income may be based more directly on the results of their work rather than hours worked.
- Relationship: An employee generally has a continuous relationship with the employer and might receive additional benefits such as pension plans, leave entitlements, and insurance. Conversely, the self-employed person tends to have clients or customers and is responsible for their own business benefits and insurance.