What’s the Difference Between an Independent Contractor vs Employee? By Dan Atkerson on October 08, 2021

Independent contractors and employees may overlap in the services they provide. This can make it difficult to determine when someone should be classified as an independent contractor or an employee. Employment attorney Dan A. Atkerson helps clients facing labor law issues reach a resolution and move forward.

It’s important that workers and employers understand the difference between independent contractors and employees in Texas. To help those in Allen, Plano, Frisco, TX, and surrounding areas get a better understanding of the issue, we’d like to take a closer look at independent contractors and employees.

Who Is Considered an Independent Contractor?

An independent contractor is someone who is self-employed and not under the control of an employer.

Many independent contractors work on their own schedule and may complete their work in their own workshop, home, or location of their choosing. They may also use their own tools or equipment and may work under their own name and not under the name of an employer.

Additionally, independent contractors are responsible for their own taxes and expenses.

Who Is Considered an Employee?

An employee is typically someone who works under the direction and control of an employer. Employees are generally required to work or provide a service for a certain amount of time and at a certain time of day determined by their employer.

The location where the work must occur may also be controlled and the tools or equipment needed to do the work is often provided to employees by the employer.

Employees don’t have the same tax responsibilities as independent contractors as these are handled by their employer through payroll taxes.

How Are They Different?

Both independent contractors and employees provide services in return for compensation. While they share this and other similarities, there is one important distinction separating the two.

According to the Texas Workforce Commission (TWC), the main thing that determines whether someone is an independent contractor or employee is whether they and their work are under direction and control of an employer. If there is no direction or control over their work, then the person is typically considered an independent contractor.

In other words, an independent contractor has more control of their daily schedule and determines their own hours of work.

When an Independent Contractor Is Actually an Employee

Sometimes employers will classify employees as independent contractors in an effort to save money or avoid paying more taxes.

By misclassifying employees as independent contractors, employers may avoid paying unemployment benefits, workers compensation, overtime wages, and hourly rates.

Someone who is misclassified as an independent contractor may not have access to workers compensation or unemployment benefits. In addition, they may not be given overtime pay, paid vacation days, and other benefits. Accordingly, they may be able to recover benefits through a lawsuit.

Contact the Law Offices of Dan A. Atkerson

If you have further questions about independent contractors versus employees, or if you believe your employment rights have been violated, please call the Law Offices of Dan A. Atkerson at (214) 383-3606 or schedule a consultation online.