What is the difference between an employee and an independent contractor?

The difference between an employee and an independent contractor in Indiana is largely based on the relationship between the two parties. Employees are those who work for an employer and are subject to that employer’s instructions and control in the performance of their work. Independent contractors, on the other hand, contract for specific services and are not under the control of the employer. Employees are typically entitled to the protections of wage and hour laws and usually receive wages on an hourly or salaried basis. This includes protection from overtime, denial of minimum wage, and other violations related to wage and hour laws. Employees also may be eligible for unemployment benefits, workers compensation, and other benefits. Independent contractors, however, are not subject to the same wage and hour laws as employees. Independent contractors are self-employed and are typically paid on a project-by-project basis. Their payment is not typically subject to taxation and they are not eligible to receive the same benefits as employees. Independent contractors are not protected by federal discrimination laws and they typically have more freedom when setting the terms of their contracts. However, with the freedom that independent contractors enjoy comes the added responsibility of having to secure their own business insurance, licenses, and other regulations. Overall, the key difference between an employee and an independent contractor is the relationship between the parties, the terms of payment, and the benefits or regulations that come with each respective title.

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What is the difference between an employee and an independent contractor?

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