Difference Between An Employee And Independent Contractor

One of the things that employers do to avoid paying overtime is to misclassify employees an independent contractor. Williams Kherkher attorneys will tell you that by doing so, the employee misses out on some important benefits. It is important for you to know the basic difference between the two. If you have been wrongly misclassified, you have the right to lodge a complaint against your employer.

It is important to understand the difference of the two terms for taxation purposes. An independent contractor runs his own business but works for another business. An employee, on the other hand, is hired by a company to perform specific work for them. Aside from that, the IRS determines the difference based on three criteria.

Behavioral Control

An employee is one whose hours of work, tools to be used, and tasks to be performed are controlled by the employer. An independent contractor, on the other hand, sets his own time and requires little or no direction or training.

Financial Control

An employee is paid a salary and hence cannot work for others. An independent contractor, on the other hand, is not bound to the company and hence can work for other companies simultaneous with the company he is working for.

Relationship

An employee enjoys benefits which mean they have a relationship with the company they are working for. An independent contractor meanwhile has a contract but does not give the employer control over them. Likewise, an employee’s work is related to the core objective of the company.

Companies that misclassify their employees may be subject to some liability. If proven, the employer may be liable for paying the past taxes which may include FICA and Federal unemployment tax.

Aside from that, they may also be subject to fines and penalties for violating the Fair Labor Standards Act.

How Employment Law Works

It is a day and age of modernity and of innovation. Long gone are the days when people solely work for the sake of profit and financial security as the current generation seeks life fulfillment as the ultimate professional priority.

Not everyone, however, has that privilege and financial security is something necessary. In some cases, losing your job may also automatically mean having to pull the kids out of school, or even selling the car or house. If you’re in a situation that is dependent on the steady paycheck that your job offers, it may be easy to neglect that your employer isn’t treating you with the kind of rights that you have never had to earn – that’s why they’re called rights.

According to the website of employment lawyers Cary Kane, there are different employment laws that operate on both a state and federal level. The employment laws that operate on a state level – such as laws concerning sexual orientation discrimination, for example – can differ from state to state, which is why it is imperative to consult an experienced, knowledgeable lawyer on matters regarding this branch of the law. It can be additionally complicated if the employer in question one of the bigger names in the industry – but just because they have the resources means that they should get away with their unjust behavior. The right legal team can get you the compensation and justice that you are owed.

Employment law actually explores a wide array of different areas that aim to make sure that employees are treated fairly and are given the benefits that their being a part of the labor force grants them. Things like being paid duly for their overtime or being granted sufficient vacation time are things that need to be protected in order to ensure that workers are happy and healthy. With these rights and privileges in place, the business can only thrive – and isn’t that the win-win situation everyone wants?