Did You Hire An Employee Or An Independent Contractor

Before you go out and hire an independent contractor, or give the next 10-99 to your contractor, there are some things you need to know. Because that person might be an employee not an independent contractor. In this blog I am going to explain what the difference is. This is very important, because the last thing you need is government agency bullying you, and fining you.

What is an employee?

An employee is one who is scheduled specific hours by the employer and is required to work those hours.    This person  is eligible under certain requirements to benefits as designated by the employer.  An employee is eligible for sick leave, medical insurance, dental insurance, and 401Ks etc. through the employer.  An employee is also eligible for Workman’s Compensation if such need should arise.  The employer will pay the employee’s income taxes such as social security and state taxes.  Usually an employee is paid a salary or by the hour.

What is an independent contractor?

An independent contractor is one who works for an individual or company but is not scheduled or required to work certain hours.  An independent contractor is totally independent as to his or her work schedule and does not receive any form of benefits from the employer.  There is no Workman’s Compensation, no medical insurance, no dental or 401K eligibility.  An independent contractor is responsible for paying his or her own taxes such as social security and state taxes.  The most common form of compensation for the independent contractor is being paid by the job.

 

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About Mark A. Schneider
Owner of Denvers Insurance and Close Contact Security Services.

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