Glossary > Employment Law > Employment Rights > Employee Classification

Independent Contractor

An independent contractor is an individual or entity hired by a company to perform specific tasks or projects. Unlike employees, independent contractors are not considered regular staff members and are typically responsible for their own taxes, insurance, and work tools.

Example #1

A graphic designer hired by a marketing agency to create a new logo on a project basis.

Example #2

A plumber hired by a homeowner to fix a specific issue in the house.

Misuse

Misclassifying employees as independent contractors can deprive workers of benefits and protections such as minimum wage, overtime pay, and unemployment insurance. This practice can also shift tax responsibilities from the employer to the worker, leading to financial burdens and insecurity.

Benefits

Independent contractors have more flexibility in choosing their projects, work hours, and methods. They also have the potential to earn higher incomes due to their specialized skills and ability to work with multiple clients.

Conclusion

It is crucial to accurately classify workers as either employees or independent contractors to uphold their rights and ensure fair treatment in terms of compensation, benefits, and legal protections.