The Ultimate Altercation: Independent Contractor and Employee

Home_Depot_employees_who_rescued_my_cameraIndependent contractor and employee. Is there any difference between these two different sets of work categories? Well, several people will say no, there is no difference as both the sets work so at the end of the it all is drawn up at same conclusion, while others will say no they are not the same at all because independent contractor work on their own basis whereas, the employees attend a fix set of job within a given time period. Maybe, we have never thought about the differences between being an independent contractor and being an employee.

In many criterions, there seems to be no variation at all. Often, both the categories of people that are employees and independent workers work, along together at the same firm, even ending up doing similar or same work.

The distinction between employees and independent contractors carries more decisions, burdens, and consequences than ever before. There are so many consequences involved in these two professions. Along with tax consequences, there are workers’ compensation, intellectual property consequences, and even health care agreements. Understanding the aftermath of misclassification is a dominant factor in structuring an employer’s workforce properly.

Lately, employers have been subjected to a few bitter decisions by the Department of Labor (DOL). They have proposed a new set of rules with respect to restrictions over the overtime exemption for white collar jobs. With a new set of protocol on the categorization of independent contractors, the heartburn for employers will continue to stay relentless.

It is publicly issued by the DOL committee that “the workers who are categorized as independent contractors will hereafter be, regarded as employees under the FLSA’s vast definitions.” This broadens the scope of people covered under FLSA, adding the common law control test to independent contractors that only used to take care of employer’s control and power over the worker.

Under the tests for economic realities, several factors seem to affect the employee-worker relationship, such as investments, worker’s opportunity for loss and gain, degree of power being exercised by the hiring firm and several other factors.

Let us discuss about the difference between Independent Contractors and Employees so far.

There are few crucial legal variations between being an employee and a contractor.

The differences climb high beyond the basic job title. Sometimes title of the job doesn’t match the legal job profile classification. There are times when job profile is changed to cope up with legal obligations. The employment status affects too many issues like tax implications, liability, and employment benefits. Here are the key differences between independent contractor and an employee.

 

                                                        EMPLOYEE

 

  1. Works for one employer.
  2. Employer sets the working hours.
  3. Usually works at employer’s firm.
  4. Entitled to employee benefits such as disability and health insurance.
  5. Part of union
  6. Protection under workplace safety

 

 

                                                 Independent Contractor

 

  1. Works for himself/herself
  2. No fixed working hours
  3. Works at home or private office
  4. No benefits until the ones recently included by DOL
  5. Cannot for union
  6. No protection as there isn’t fixed workplace.

 

 

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