Employee vs Contractor: What is The Difference?

While common law, the Fair Labor Standards Act, and the IRS have each helped define the difference between an employee vs a independent contractor, it is not as easy

as you might think and could have some costly consequences to both parties (See “Employee vs. Contractors: Penalties of Misclassification”). This is because employees are subject to financial withholding and deductions such as income or Social Security tax, often are

entitled to employment benefits, and are protected by employment discrimination and overtime laws. If an employer is caught misclassifying an employee as an independent contractor While the following is not an all encompassing list, below is a chart that shows some key differentiating point between the two.