Employment Law: Difference Between Independent Contractor and Employee
An independent contractor is a person or business that provides goods or services to another entity under the terms of a contract of agreement. An independent contractor, also known as a freelancer, does not work regularly for an employer, but as needed. If you have been misclassified as an independent contractor, contact your California employment attorney for a confidential consultation.
The benefits of working with an independent contractor, generally mean the employer saves money via lower taxes, no benefits, workers’ compensation, and lower taxes. However, if legal issues were to arise serious claims may result from unpaid taxes, wages civil fines, attorney fees, and the possibility of criminal charges.
The United States Supreme Court explains that there are no clearly defined rules that determine employees and independent contractors. Rather, overall relationship plays a key role in determining.
- The skill required
- The source of the instrumentalities and tools
- The location of the work
- The extent of the hired party’s discretion over when and how long to work
- The method of payment
- The hired party’s role in hiring and paying assistants
- Whether the hiring party is in business
- The provision of employee benefits
- The tax treatment of the hired party