| Employee |
Independent Contractor |
| Usually works for only one employer. |
Generally provides consulting services to more than one company. |
| Works the hours set by the employer. |
Sets his or her own hours. |
| Usually works at the employer's place of business. |
Works out of his or her own office or home. |
| Often receives employment benefits, such as health and disability insurance. |
Does not receive employment benefits from the employer. |
| Works under the control and direction of the employer. |
Works relatively independently. |
| Accomplishes tasks in the manner the employer has requested. |
Has the authority to decide how to go about accomplishing tasks, and does so without the employer's input. |
| Tends not to incur costs or make investments in the work. |
Incurs the costs associated with performing the job. |
| Has a general education and experience background, and receives special training from the employer in order to do the job better. |
Has acquired very specialized skills and comes to the work relationship with a particularized education and experience background. |
| Receives net salary after employer has withheld income tax, Social Security, and Medicare tax under the Federal Insurance Contributions Act (FICA). |
Is not subject to tax or FICA withholding, but pays his or her own self-employment tax. |
| Will likely be eligible to receive unemployment compensation after lay off or termination. |
Is not eligible for unemployment compensation benefits. |
| Will receive worker's compensation benefits for any workplace injury. |
Is not eligible for worker's compensation benefits. |
| Generally (unless employment is at will) can be terminated by the employer only for good cause and with notice. |
Generally (unless the consulting contract is for a specified term) can be let go by the employer for any reason, at any time. |
| Is covered by federal and state wage and hour laws such as minimum wage and overtime rules. |
Is paid according to the terms of the contract, and does not receive additional compensation for overtime hours worked. |
| Has the protection of workplace safety and employment anti-discrimination laws. |
Usually is not protected by employment anti-discrimination and workplace safety laws. |
| May be entitled to join or form a union. |
Is not entitled to join or form a union. |
