Which type of worker is considered a statutory employee?

A statutory employee is a worker who is treated as an employee for tax purposes, even though they may not fit the traditional definition of an employee. This classification primarily applies to certain types of workers who meet specific IRS criteria and allows employers to withhold Social Security and Medicare taxes from their earnings.

The correct answer reflects a full-time life insurance sales agent who primarily works for one company. This worker is considered a statutory employee because they receive commissions from a designated company and work under its direction, even if they operate with some autonomy. Their income is subject to specific withholding requirements, distinguishing them from independent contractors.

In contrast, a part-time life insurance agent with multiple employers may not meet the exclusivity required for statutory status, as having multiple employers dilutes the control and dependency on a single source. A driver with a significant investment in their delivery vehicle could be an independent contractor, as they are often responsible for their own business expenses and may not work exclusively under one company. Finally, an individual working intermittently on a freelance basis would typically be classified as an independent contractor, lacking the consistent employer-employee relationship found in statutory employees.