One of the biggest problems that many people have is figuring out if you are actually an employee or not. “But I get paid!” I can hear you say, “I have to be an employee! I have a job!” Believe me, I can understand your confusion at this question. The truth is, just because you get paid doesn’t necessarily mean that you are an employee. While technically you may be employed by a company to produce either items or a service, you may not be an employee by definition.
An employee is technically someone who generally only works for one company. This, however, isn’t the only factor. An employee will also work specific hours that are set forth by the employer at this employer’s place of business. Many employees are welcomed and encouraged to join a union. They are also generally able to apply for things like benefits through work and unemployment if let go. An employee is also covered by federal laws which set a minimum wage and overtime laws. One of the biggest differences is that the net pay that an employee receives is after most taxes have been taken out by the employer.
Alternately, an independent contractor can work for multiple companies doing specialized work which they have had previous education for. They will often work from home and so can work any hours they choose as long as deadlines are met. There are not unions that allow independent contractors and cannot apply for unemployment if let go. There are also not employment benefits like health insurance for an independent contractor. There is no protection that assures they receive minimum wage and there is no overtime pay. Also, taxes are not taken out for things like social security and Medicare, so these must be paid separately.
The difference that we are most concerned about is that independent contractors cannot apply for worker’s compensation. Where an employee can apply for worker’s compensation benefits if hurt on the job, an independent contractor does not have this ability. If they are hurt on the job, the treatment falls completely to them and no compensation will be provided. Are you an independent contractor or an employee? If you are still not sure, check with those you work for. It can mean the difference between paying for treatment yourself and calling Collier!