PSI Virginia Real Estate Practice Exam

What characterizes an independent contractor?

1. Fully controlled by the employer’s policies

2. Not considered an employee under any circumstance

3. Works under set working conditions dictated by an employer

4. Receives payment but has control over working methods

The correct answer is: Receives payment but has control over working methods

An independent contractor is characterized by having control over their own working methods while receiving payment for their services. This arrangement sets independent contractors apart from employees, as they typically determine how to complete tasks and manage their time without strict oversight from an employer. This independence allows them to apply their expertise and skills in a flexible manner, leading to a relationship based on the completion of tasks or delivery of services rather than compliance with an employer's policies or methods. In contrast, other options describe attributes associated with employees rather than independent contractors. Independent contractors are not subject to the same control as employees, allowing them to operate their businesses with greater autonomy. Understanding this distinction is crucial for recognizing the legal and practical implications of different working relationships in real estate and other fields.