When employers hire an independent contractor, they usually spend money on:

• A. office supplies for all employees
• B. employee benefits such as health insurance
• C. payroll taxes for the contractor
• D. payments for labor services provided

Answer: (D)

Verified step by step guidance

1. Understand the nature of the relationship between employers and independent contractors compared to employees. Independent contractors are self-employed and provide services under a contract, not as employees.
2. Identify typical employer expenses for employees, such as office supplies, employee benefits (like health insurance), and payroll taxes, which are usually mandatory for employees but not for independent contractors.
3. Recognize that when hiring an independent contractor, employers generally do not pay for employee benefits or payroll taxes because contractors handle their own taxes and benefits.
4. Focus on what employers actually pay independent contractors for: the labor services provided, which is the direct payment for the work done.
5. Conclude that the primary cost to employers when hiring independent contractors is the payment for labor services, distinguishing it from the broader set of costs associated with hiring employees.