Employees Work Business Independent Company Paid Contractors Eslpod

Many U.S. companies have two types of people who do work for them: employees and independent contractors. The difference between these two groups is the amount of control the company has over the worker and how the work is being done.

"Employees" are people who usually work only for one company and are "supervised," or watched, by someone with more power in the company. Employees can "moonlight," or have a second job, but many companies don't like that, so employees sometimes keep their second job a secret. Employees are "on the payroll," or get paid a set amount on a regularly basis. Employees also get "benefits," including health insurance and paid vacation time. A company has to pay employment taxes to the government for each of their employees.

An "independent contractor" is someone who is hired by a company, usually to do one specific job. They may be hired for a short-term project or work on a long-term "contract," or agreement. Usually, independent contractors work without someone closely supervising their work, but they aren't paid unless their work is acceptable. The independent contractor is not on the payroll and must "invoice," or submit a bill, to get paid and they do not receive benefits as employees do. Independent contractors usually work for more than one company and it is the contractor's own responsibility to pay taxes.

Many small business hire contractors rather than employees because it is cheaper and more flexible. Medium to large-size companies usually have a mix of employees and contractors working for them.