Which of the following factors is most important in distinguishing between an employee and an independent contractor?

The degree of control exercised by the employer over the worker is the most critical factor in distinguishing between an employee and an independent contractor. When an employer has significant control over how the work is performed, including the means and methods the worker uses to accomplish tasks, this typically indicates an employer-employee relationship.

In contrast, independent contractors generally operate with greater autonomy and are allowed to determine how they complete their tasks. The employer may specify what needs to be done but does not dictate precisely how to do it. This control aspect is fundamental for legal and tax purposes, as it affects liability and employment rights.

While factors such as payment method, regularity of work, and tools provided can contribute to the classification of a worker, they are not as determinative as the degree of control. For example, independent contractors may be paid on a per-project basis, which is different from an employee's hourly or salary-based compensation. However, unless that payment structure is accompanied by a lack of control over how work is performed, it may not be sufficient to classify someone as an independent contractor.

In summary, while other factors are significant, the degree of control held by the employer is the most pivotal in deciding whether a worker is categorized as an employee or an independent contractor