by Strategic HR Partners

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by Strategic HR Partners

Independent Contractor vs. Employee

There are very important legal differences between being an independent contractor and an employee.

These differences go beyond job title. In fact, sometimes the job title doesn’t match the legal classification-and sometimes job titles are changed to get around legal obligations. Your employment status affects many issues such as employment benefits, tax implications, and liability.

Here are a few characteristics of both an employee and an independent contractor:

Employee

Usually works for only one employer.

Works the hours set by the employer.

Usually works at the employer’s place of business.

Often receives employment benefits, such as health and disability insurance.

Works under the control and direction of the employer.

Has a general education and experience background, and receives special training from the employer in order to do the job better.

Independent Contractor

Generally provides consulting services to more than one company.

Sets his or her own hours.

Does not receive employment benefits from the employer.

Incurs the costs associated with performing the job.

Has acquired very specialized skills and comes to the work relationship with a particularized education and experience background.

Is paid according to the terms of the contract, and does not receive additional compensation for overtime hours worked.

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