Independent Contractor Employee
Generally provides consulting services to more than one companyUsually works for only one employer
Sets his or her own hoursWorks the hours set by the employer
Works out of his or her own office or homeUsually works at the employer’s place of business
Does not receive employment benefitsOften receives employment benefits, such as health and disability insurance
Works relatively independentlyWorks under the control and direction of the employer
Incurs the costs associated with performing the jobTends not to incur costs or make investments in the work
Has acquired very specialized skills and comes to the work relationship with a particularized education or experience backgroundHas a general education and experience background, and receives special training from the employer in order to do the job better
Is not subject to tax or FICA withholding, but pays his or her own self-employment taxReceives net salary after employer has withheld income tax, Social Security and Medicare tax under FICA
Is not eligible for unemployment compensation benefitsIs likely eligible to receive unemployment compensation after layoff or termination
Is not eligible for worker’s compensation benefitsWill receive worker’s compensation benefits for any workplace injury
Generally can be let go by the company for any reason, at any timeGenerally can be terminated by the employer only for good cause and with notice
Is paid according to the terms of the contract, and does not receive additional compensation for overtime hours workedIs covered by federal and state wage and hours laws such as minimum wage and overtime rules