Which of the following is a common characteristic that distinguishes an employee from an independent contractor?

The distinction between an employee and an independent contractor is often marked by the type of payment structure. Employees typically receive a consistent wage or salary, often accompanied by benefits such as health insurance, retirement contributions, and paid time off. In contrast, independent contractors are usually paid on a per-project basis or through invoices for services rendered, without such ancillary benefits.

This focus on payment structure is critical in legal terms as it highlights the different obligations an employer has toward employees compared to independent contractors. Employees often have taxes withheld from their paychecks, while independent contractors are responsible for paying their own taxes, further underscoring the financial and legal separations between the two classifications.

Understanding this characteristic is crucial for compliance with labor laws and for determining the correct classification of workers to avoid misclassification penalties.