What Is an Independent Contractor vs. an Employee?

employees with headsets

If you are an independent contractor, an employer may be relying on you to accomplish certain tasks. However, there may be an issue if your employer begins to treat you as one of their employees. Read on to discover the difference between an independent contractor and an employee and how a seasoned New York employee rights lawyer can ensure that you are being treated appropriately.

What is the difference between an independent contractor versus an employee?

The main difference between an employee and an independent contractor is that an employee is on an employer’s payroll while an independent contractor is not. With being on the payroll, an employee has an income tax, Social Security, and Medicare withheld from their paid wages.┬áBut in exchange, an employee is eligible for certain benefits, such as health insurance, paid time off, and 401k options.

On the other hand, an independent contractor does not have taxes withheld from their pay, but they also do not receive benefits. In the end, though, they are granted more freedom and flexibility by not being required to comply with the company’s guidelines or remaining loyal to the company.

How can I determine whether my employer is treating me appropriately?

Notably, the Department of Labor and the Social Security Administration uses the Economic Reality test to determine whether an individual is considered an independent contractor or an employee. Specifically, New York State uses the Common Law test to determine worker status. This test makes its determination by examining the following:

  • If an employer has behavioral control over a worker, then said worker is an employee.
  • If an employer has financial control over a worker, then said worker is an employee.
  • If the relationship appears to be an employer-employee relationship (as seen through contracts, benefits, etc), then said worker is an employee.

Aside from these tests, if you would like to personally determine whether your employer is appropriately treating you as an independent contractor, then you must ask yourself the following questions:

  • Has an employer given you the flexibility to work on the assigned project when, where, and how you want?
  • Has an employer given you training on how to work on your assigned project?
  • Has an employer given you a specific endpoint for your assigned project?
  • Has an employer given you the autonomy to work on your assigned project as you see fit?
  • Has an employer given you the autonomy to accept work from other businesses?
  • Has an employer deducted taxes from your payments?
  • Has an employer made you subject to the company’s performance reviews?
  • Has an employer made you subject to the company’s discipline process?

Depending on the answers to the above questions, then your employer-contractor relationship is possibly being treated as an employer-employee relationship. If this is your case, then you must take immediate action to correct this error. For assistance in doing so, contact a competent New York employee rights lawyer today.

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