How do employees and independent contractors differ?
In order to receive compensation for work injuries, you must be considered a full-time employee. Unfortunately, some employers misclassify their workers to avoid providing appropriate compensation, which can leave you without an income and on the hook for medical expenses. To ensure you’re able to determine your own employment status, the U.S. Department of Health & Human Services offers the following information.
To be considered an employee, one usually completes a job application before hire. This application will then be reviewed by human resources personnel, who will provide a job offer if the applicant meets the criteria. Upon acceptance, you also need to provide additional information, as well as complete relevant tax forms. You’re also covered by state and federal labor laws concerning overtime pay, workers’ compensation coverage, and unemployment pay.
Many employers keep detailed records on their workers. This typically includes marital status, date of birth, and citizenship information. In terms of taxes, you’ll be provided a W-4 upon hire, and will report all earnings using a W-2 when tax time rolls around. Conversely, an independent contractor must provide a W-9 when hired and will report earnings greater than $600 using a 1099 form.
Payment is provided differently depending on your worker classification. If you’re a full-time worker, you’ll receive an hourly or salaried wage. You’ll also be paid according to a predetermined schedule. Pay schedules can vary, with paydays occuring once a month or even twice monthly, and employees must be notified of any changes before they happen. Independent contractors are often paid when their task is completed, although they can also be privy to recurring pay schedules for the duration of the assignment.