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Types of Employment
Independent Contractor VS Employee
Understanding the difference between independent contractors and employees is essential for proper classification, legal compliance, and maintaining workplace standards. The definition of an employee and independent contractor is below.
Employee
An individual hired by a company to perform services under the employer’s control and direction. Employees typically receive training, follow a set schedule, and use company tools.
Independent Contractor
A self-employed individual or business that provides services to a company under terms defined in a contract. They maintain control over how the work is completed and often work with multiple clients.
Generally, all employees are withheld income taxes, Social Security, Medicare and unemployment taxes from his/her wages. However, employers are not required to withhold or pay taxes for Independent Contractors. Before determining whether an individual should be on an agreement paid through accounts payable or an employee paid through payroll, you must first examine the relationship between UIW/SACHS and the individual performing the service. Use the checklist below to determine if the person is an independent contractor or employee.
Independent Contractor VS Employee Checklist