Section A

Which of the following tests is used by the courts to determine whether a worker is an employee or an independent contractor by examining factors such as who provides the tools, the degree of financial risk, and the opportunity to profit?

Answer options:

The control test

The integration test

The economic reality (multiple) test

The mutuality of obligation test

How to approach this question

Identify the test that looks at the broader picture of the working relationship, specifically focusing on financial aspects like risk and tools.

Full Answer

C.The economic reality (multiple) test✓ Correct

The economic reality test (also known as the multiple test) looks at the whole picture of the relationship. It asks whether the worker is in business on their own account by examining factors like financial risk, provision of equipment, and tax arrangements.

Common mistakes

Confusing the economic reality test with the older, narrower control test.

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Practice the full ACCA LW — Corporate and Business Law Practice Exam 6

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