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Employee vs Independent Contractor Checklist


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Employee vs Independent Contractor Checklist Employee vs Independent Contractor Checklist is created for managers who wish to define the difference between the legal and labour status of workers.

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 Comparison of Regular Employee against Independent Contractor:

  • Employer provides trainings to employees, but not to contractors (an employer is interested to invest into long-term employment relationships and development of professionalism of his regular workforce, while contractors are expected to be established and effective specialists);
  • Employers can require from their employees to work on-site only (for example in the office), while contractors can work where it makes sense for their job accomplishment and successful results (the employer may suggest a workplace, but cannot demand to work there);
  • Worker can complete his tasks off-site when he is an independent contractor, while employee needs special permission and grounds to work remotely (a staff member needs to provide the proof of his inability to reach his workplace on-time or on certain day each time he is late or absent, let’s say a medical report);
  • Organizations supervise work of their regular staff members, while independent contractors are responsible rather for final results, but not for current level of performance, work style, or other aspects (employer can suggest desired work behaviors and regulate them with a help of contract conditions or verbal agreement when this makes sense);
  • Employees are provided with regular work hours daily and weekly, so overtimes are payable at special rate, and underwork can be penalized. Independent contractors do not have fixed hours, while they self-manage their irregular hours to complete contracted work on-time;
  • Employers can set work hours for their regular workforce, while work hours of contractors are defined rather by requirements for work accomplishment, and common sense (employers are interested towards quality of the final outcomes along with acceptable price);
  • Employee has a stable salary which is calculated with a help of hourly rate set by employer. Independent contractor obtains compensation stated in the contract, based upon hourly rate or other assumptions agreed with the employer;
  • Organization provides tools, equipment, and other essential supplies to their personnel as the employer is responsible for organization of the best possible performance, while independent contractors come with their own equipment (they invest into their instruments themselves);
  • Benefits and other social guarantees are provided to regular staff members, while contractors usually don’t receive any social package from their employers, until this aspect is somehow deliberated in the contract;
  • Expenses per workplace (including overhead costs) are planned and managed by employers for their regular team, while contractors pay their expenses themselves, until some costs are compensated according to terms of contract;
  • Employees as well as independent contractors sign employment contracts for services they provide to their employers, but a regular employee can have only one active employment contract, while.....

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