Employee v. Independent Contractor - Definitions


An employee is an individual who performs services that are subject to the will and control of an employer, both in terms of what must be done and how it must be done. The employer can allow the employee considerable discretion and freedom of action, so long as the employer has the right to control both the method and result of the services performed. An employee who provides the services for payment in a capacity other than their normal duties is an employee for those services, paid through Payroll, with applicable tax withholding. Employers are legally required to withhold Federal and State income taxes as well as FICA taxes on the wages of workers classified as employees.


Independent Contractor

An individual over whom the employer has the right to control or direct only the result of the work and not the means and methods of accomplishing the result. Employers are not responsible for employment related taxes for Independent Contractors. The employer is required, however, to report annual payments of $600 or more on form 1099-Misc (Non-US/Non-resident aliens are subject to NRA withholding and reporting rules).

There are many factors used in determining proper classification of work status. Please use the "Employee v. Independent Contractor Determination Worksheet" form, which has been developed to assist you in this process.