Independent contractors versus employees: Know the difference

Independent contractors versus employees: Know the difference

| Jun 26, 2020 | Uncategorized |

 One issue that some people run into with their employment is that they are told they’re independent contractors but are then treated like employees of a business. Independent contractors are significantly different in a few ways, from having no workers’ compensation coverage from their client to receiving no benefits. On the other hand, an employer generally does need to provide workers’ compensation, health care options and other benefits for their full-time employees.

Are you an independent contractor or an employee? That depends on the situation. Here’s a description of each.

Independent contractor

An independent contractor is self-employed. They pay their taxes directly to the government. The company has no right to control how the worker does their job, though a contract or expectations may be set.

Financially, is the worker’s job controlled by the client? Do they decide if the IC is reimbursed? Who pays for tools and accessories?

Finally, if there are any contracts, do they indicate long-term employment, or do they describe a client-independent contractor relationship? Is the relationship a key aspect of the business? If so, the independent contractor may actually be an employee.

Employee

Employees are different, because they could be required to wear a uniform, come to work at certain times or follow all the rules of the business in how they do their job. Employees also receive benefits in many cases, and employers pay a portion of their taxes on their behalf.

If you believe that you’re actually an employee but have been mislabeled as an independent contractor, it may be in your best interests to speak with your attorney about the steps to take next. You could have an opportunity to seek benefits or compensation for the way you’ve been misclassified.