Check this link:
I hope this helps.
You’ve asked a pretty detailed legal question, which also has tax implications. You can go to the www.irs.gov for the IRS’s tax opinion on the difference between them and how to fall, for tax purposes, into one bucket or the other.
Employees – work is more highly controlled / supervised by the place of work. May include rules, evaluations, and a framework for job duties and expectations. Receives a W-2.
Contractors – work for themselves. The place they rent has little to no control over their work product. If the place they’re working collects money from customers and pays the contractor, contractor receives a 1099. If the contractor collects the money directly, they won’t get a 1099 and are responsible for tracking their income for tax purposes.
Does this help? There’s a whole lot more….
beyond the legal implications, the roles between an independent contractor and an employee are also often in the eye of the beholder. For example, I teach classes at studios and wellness centers, and in some cases I am treated as an employee, at others as an independent contractor, and I am pretty much doing the same thing at each location.
I agree with you, Karen, that it should be, for the most part, transparent to the client whether we are employees or contractors. In an ideal world, we would treat our clients with the same level of professionalism.
That said, it really is a very different legal relationship. I come at it from the tax side as a former tax accountant so I can’t and won’t opine legally. What I do know – and I have two clients who are lawyers and just gave the “employee versus contractor” talk to MBA students – is that the law here is getting more strict and not less. A company engaging “contractors” when they really should be “employees” can get in major trouble.
Hello Debie Doole,
An independent contractor (IC) is their own boss working for a client; whether that client is a corporation or one person. The IC does not answer to someone else because that someone else signs the IC check. The IC makes their own decisions about when, where and how long to work or run things.
That being said, I view the client as my boss; but, the client does not rule over me (IC).
Natalie aka NAPS 2 B Fit.