{"id":4728,"date":"2016-04-04T10:47:41","date_gmt":"2016-04-04T15:47:41","guid":{"rendered":"https:\/\/content.findlaw-admin.com\/ability-law\/smallbusiness\/employment-law-and-human-resources\/hiring-independent-contractors-vs-employees.html"},"modified":"2026-05-01T05:09:00","modified_gmt":"2026-05-01T10:09:00","slug":"hiring-independent-contractors-vs-employees","status":"publish","type":"page","link":"https:\/\/www.findlaw.com\/smallbusiness\/employment-law-and-human-resources\/hiring-independent-contractors-vs-employees.html","title":{"rendered":"Hiring Independent Contractors vs. Employees"},"content":{"rendered":"\n
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Hiring Independent Contractors vs. Employees<\/h1>\n\n
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\n By Susan Buckner, J.D.<\/a> | Legally reviewed by Melissa Bender, Esq.<\/a>\n | Last updated\n
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Editorial Note: We earn a commission from affiliate partner links on FindLaw. Commissions do not affect the editorial integrity of our legal content.<\/p>\n\n <\/div>\n \n

\n \n <\/i>\n Legally Reviewed\n <\/summary>\n\n
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This article has been written and reviewed for legal accuracy, clarity, and style by FindLaw\u2019s team of legal writers and attorneys<\/a> and in accordance with our editorial standards<\/a>.<\/em><\/p>\n\n <\/div>\n <\/details>\n\n

\n \n <\/i>\n Fact-Checked\n <\/summary>\n\n
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The last updated date refers to the last time this article was reviewed by FindLaw or one of our contributing authors<\/a>. We make every effort to keep our articles updated. For information regarding a specific legal issue affecting you, please contact an attorney in your area<\/a>.<\/em><\/p>\n\n <\/div>\n <\/details>\n<\/section>\n\n\n

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An independent contractor is a self-employed professional hired for a specific project or to perform services under a contract. The difference between an independent contractor and an employee is the degree of control of how, when, and where they work while using their own equipment and skills. The difference is critical so employers are not liable for employment taxes, insurance, and benefits.<\/p>\n\n <\/div>\n\n\n\n

Independent contractors<\/span> and employees often work at the same company, even doing similar work. There are important legal differences between the two. The main difference between an employee and an\u00a0independent contractor<\/span><\/u><\/a>\u00a0is the employer\u2019s degree of control<\/span> over the worker.<\/p>\n

An employer controls how, where, and when employees perform their jobs. The employer hires a contractor to complete a task and only controls the result.<\/p>\n

Employers trying to save money sometimes classify employees as independent contractors<\/span>.\u00a0Misclassification<\/span><\/u><\/a>\u00a0can have severe consequences for small <\/span>business<\/span> owners<\/span>. Employment status affects benefits, tax credits, employer liability, etc. Employers must know the difference between contractors and employees before hiring employees<\/span>.<\/p>\n

Employee vs. Contractor: Which One Do You Need?<\/h2>\n

When business owners<\/span> need a new employee, they must weigh their options. You may look around at everything that needs to get done and decide you need another employee right now. Then, you crunch the numbers and realize your business won\u2019t support another full-time employee<\/span>. You may need specialized tasks done periodically, but none of your workers have the skills required.<\/p>\n

Choosing which type of worker<\/span> is best for your business means weighing the long-term and short-term<\/span> considerations of your needs and those of the employee.<\/p>\n

Full-Time Employee<\/span><\/strong><\/h3>\n

Hiring a full-time employee<\/span> means taking on a new worker. You must follow the\u00a0Fair Labor Standards Act<\/span><\/u><\/a>\u00a0(FLSA<\/span>) regulations. If you offer employee benefits<\/span>, you must provide them to this new worker. New employees are overhead, so your profit margin must be high enough to cover this cost.<\/p>\n

Some signs you may want a full-time employee<\/span>:<\/p>\n