What is the difference between an independent contractor and an employee?

Employees and independent contractors can often do the exact same work, but the premis of how the work is done can help determine how the person is classified. The classification will determine the benefits that you’re allowed to receive – which include protection via wage and hour laws, discrimination by employers, health benefits, workers compensation, pension plans and family medical leave.

Usually, the company will have an independent contractor fill out a 1099 prior to employment, which signals that the independent contractor is responsible for their own taxes & withholding. Employees will fill out a W-2, which signals that taxes will be withheld for the employee.

However, just because the position is labelled as an independent contractor and a 1099 was issued – it doesn’t mean that the position actually fulfills the requirements of being an independent contractor and may be a way an employer is trying to reduce their financial obligations. This could be done both intentionally and unintentionally by the employer.

Common jobs that get misclassified as independent contractors:

  • Delivery drivers
  • Taxi drivers
  • Nurses
  • Home health aids
  • Housekeepers
  • Fitness coaches
  • Adult Entertainment workers

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