What Is the Difference Between an Independent Contractor and Employee?

signing an independent contractor agreement

When you work with an employer, understanding your role and relationship is vital. There are significant differences between the working relationship of an independent contractor and a company versus an employee and their business. It’s also essential to understand what your relationship is before signing an agreement, as some companies may try to take advantage of their workers. If you believe you are being misclassified and barred from the correct pay, a Providence, Rhode Island wage & hour lawyer can help you get the compensation you are entitled to.

How Does an Independent Contractor Differ from an Employee?

When working with a business, understanding your working relationship is vital.

Traditionally, independent contractors are not employees of a business but act as a third party who works with a company. This person is not on the payroll but receives compensation for their work upon completion of a project. Similarly, independent contractors do not qualify for benefits and overtime compensation, as they are considered self-employed individuals. For example, freelance writers who work from home and create blog posts for a company are considered independent contractors. They will provide blog posts for a predetermined rate but do not receive overtime, worker’s compensation, or benefits.

Employees, on the other hand, are not self-employed but work directly for a business. This means they are on the payroll and receive benefits and overtime compensation when eligible. Similarly, they complete tasks assigned to them by their employer during the set hours of their employment, and they are given the necessary training and instruction to satisfy their job responsibilities.

What Should I Do if I Believe I’m Being Misclassified?

If you believe that you are being classified as an independent contractor when you should be receiving the benefits of an employee, you’ll need to take the necessary steps to receive the compensation you are entitled to.

The first step is to talk to your employer and express your concern about the employment relationship. Unfortunately, many employers will classify their workers as independent contractors to cut costs. If speaking with your employer does not provide more clarity, you can escalate the situation to file with the IRS. You can file a Form SS-8, which helps clear up your worker status for tax purposes. While your employer can still treat you like an independent contractor, they face hefty fines for failing to classify your role correctly.

When all else fails, you’ll need to enlist the help of an attorney. Unfortunately, many employers take advantage of their employees. At the Herman Law Group, we believe those under the control of their employers should be treated as such. If you are being treated unfairly at work and denied fair compensation, contact our law office today to learn how we can help you.

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