What are the differences between an employee and an independent contractor?
Employees and independent contractors are both individuals that provide services to businesses. However, the two classes of workers have certain differences between them. Employees are individuals that work under a contract of employment with a company. Employees have an employer-employee relationship with the company they are working for, and the company is responsible for withholding taxes from the employee’s paycheck. The company is also liable for providing benefits, such such as unemployment insurance, workers’ compensation, and Social Security. In California, employees must also be paid the statutory minimum wage. On the other hand, independent contractors are individuals that provide services to companies, but do not have an employer-employee relationship with the company. They are responsible for withholding their own taxes and paying their own benefits. In addition, independent contractors can set their own rates for their services and are not necessarily subject to the same minimum wage requirements as employees. Independent contractors also have more flexibility with the work they do, as they are not as bound to company policies as regular employees. Overall, employees and independent contractors are different in the sense that employees are bound to the company they are working for, while independent contractors have more freedom and autonomy in their work.
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