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How employees and independent contractors differ

On Behalf of | Sep 15, 2022 | Wage & Hour Laws |

When you earn money working for a Florida business, how the owner of that business classifies you matters and has far-reaching impacts. There are some significant and distinct differences between employees and independent contractors. These differences include everything from how much control the party paying you has over you to whether your employer has to offer you benefits.

Per the IRS, how much independence you maintain when it comes to the work you provide is a deciding factor in whether you are an employee or an independent contractor.

How the employee relationship works

If you are an actual employee, rather than a contractor, your employer typically maintains the right to tell you when and how to do your job. Your employer also has to withhold certain taxes, including income taxes and Social Security taxes, when paying you as an employee. Your employer may also provide you with the space and supplies you need to perform your work if he or she classifies you as an actual employee.

How the contractor relationship works

As a contractor, you have more control over your work and how and when you supply it. You do not gain access to employment benefits. Your employer also does not have to withhold or pay taxes on any payments it makes to you as an independent contractor.

Employee misclassification occurs for numerous reasons, but when it does happen, it often leads to hardships for the misclassified employee. If the employer did misclassify you as an independent contractor, rather than an employee, that employer may face legal sanctions. It is therefore important for employers to consult with an employment attorney to make sure its workers are properly classified.