Management Notes

Reference Notes for Management

Employee Vs Independent Contractor – 10 Major Differences | Human Resource Management (HRM)

Employee Vs Independent Contractor

Employee Vs Independent Contractor

Workers’ classifications as either employees or independent contractors have significant consequences for both the workers and their organizations. There are various aspects of these distinctions, such as legal rights and responsibilities, tax obligations, benefits, and working relationships.

Employee

In general, an employee is someone who performs services for an employer under its control and direction. Employees typically have a formal, structured relationship with their employers, with obligations and benefits outlined in an employment contract. Taxes, insurance, and workplace protections are some of the rules and regulations that they must adhere to.

Employees are individuals who are employed by their employers. The employer has a considerable amount of control over the employee’s work, including the manner in which, when, and where it is performed in such a relationship. Employee characteristics include:

  1. Control: Employers are allowed to provide specific instructions and supervise the employee’s activities, including controlling their work.
  2. Employer integration: The employee’s work contributes to the organization’s goals and success through its integration with its business operations.
  3. Equipment and tools: The employer typically provides the employee with all the necessary tools, equipment, and resources.
  4. Financial Relationship: The employer is responsible for withholding and remitting payroll taxes on behalf of the employee as part of the financial relationship. Employees may receive a regular salary or an hourly wage as well as benefits such as health insurance, sick leave, and retirement plans.
  5. Relationship duration: Employees typically work for a company for a long period of time, with the expectation of being employed for the foreseeable future.

Read more