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What differs independent contractors from traditional employees?

On Behalf of | Jan 31, 2022 | Employee Classification

You started a new job recently, but you do not know how your company classifies your position. Are you a regular employee or an independent contractor?

Business News Daily explains the difference between employee classifications. Learn how to determine whether your company misclassified you.

Defining independent contractors

Independent contractors offer their professional services to businesses and individuals under an agreement. The contract defines the type and amount of work performed, pay, duties and other aspects of how to navigate work for a specific project. Independent contractors have the freedom to work for multiple clients or companies simultaneously.

Common examples of independent contractors include freelance graphic designers, real estate agents, real estate writers and IT professionals. Even if these professionals work with an agency, team or network, they have autonomy.

Defining traditional employees

Employers have the right to control the work a traditional employee performs. This influence extends to companies deciding how to complete work and the specific work to complete. Even exempt employees, who often have more freedom than traditional employees, must use sound judgment and discretion to perform their duties in a way their employer approves.

Misclassifying independent contractors and traditional employees

Employees, contractors and companies deserve to know how to classify a working relationship. If employers decide how, when and where a person works, that individual likely classifies as an employee. When workers must complete company training, they classify as employees, because the company dictates work methods. If an employee has the right to assign duties to anyone, that person probably qualifies as an independent contractor.

Companies owe it to themselves and their workforce to classify employees properly. Neglecting to do so could violate a person’s rights.