What is the difference between a contractor and an employee?

The difference between a contractor and an employee is an important concept to understand when it comes to employment law in California. Contractors are considered their own business entity and are responsible for their own taxes and legal liabilities. They are hired to provide specific services, and the company will typically not provide them with any equipment or benefits. Employees, on the other hand, are officially employed by the company they work for and held to a different standard in terms of taxes, benefits, and legal responsibilities. Employees usually work in a set role with specific expectations and are provided with certain benefits and equipment by the employer. In California, employers must report any workers classified as employees to the Employment Development Department (EDD), withhold taxes and social security, and ensure that their employees have the appropriate insurance and workplace safety standards. Contractors, however, are not legally considered employees and are not held to the same standards. Contractors are responsible for their own taxes and benefits, and employers do not need to report them to the EDD. It’s important to understand the distinction between contractors and employees in order to comply with the laws in California. It’s illegal for employers to misclassify their workers and can result in hefty penalties if the appropriate employment laws are not followed. It’s important to check with the EDD and seek the counsel of an employment lawyer if there are any questions or doubts about the classification of a worker.

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What is the difference between a contractor and an employee?

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