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When is a worker considered an employee rather than an independent contractor?

  1. When the employer has the right to tell the worker to do certain work

  2. When the employer has direct control over the work being performed

  3. When the worker can make a profit or loss on the work

  4. When the worker doesn't set his own hours

The correct answer is: When the employer has direct control over the work being performed

A worker is classified as an employee rather than an independent contractor primarily based on the level of control the employer has over the work performed. When an employer has direct control over the specific tasks and how they are executed, this typically indicates that the worker is functioning in an employee capacity. This relationship often involves the employer dictating not only the work to be done but also when, where, and how it should be completed. This distinction is critical because employees generally receive benefits and protections under employment laws, while independent contractors operate with greater autonomy and bear more business-related risks. The other options touch on various elements of the employment relationship, such as setting hours or potential for profit or loss, but they do not capture the fundamental aspect of control that categorizes a worker as an employee. Control over the work process serves as a pivotal factor in aligning the working relationship with the definition of employment.