Nowadays, an increasing number of workers are shunning the typical “9 to 5” job in favor of working for themselves under what should be more flexible terms. The growing “gig” economy, which consists of workers who work largely in freelance capacities, is raising important questions about how employers must classify the people who perform work on their behalf. Unfortunately, some employers are intentionally misclassifying workers for their own benefit.

According to the U.S. Department of Health & Human Services, an employer’s obligations differ broadly when they employ standard employees versus independent contractors. More specifically, an employer does not have an obligation to provide sick pay or unemployment benefits to independent contractors, and employment and labor laws also do not apply to this audience. Furthermore, an employer must withhold taxes for formal employees, while he or she does not need to do the same for independent contractors.

In other words, there are some financial benefits to hiring contract workers as opposed to formal employees, but an employer may not misrepresent an employee as a contract worker simply to save money or avoid hardship. There are, however, some important distinctions that may help members of the workforce figure out whether they are, in fact, employees or independent contractors.

Employers, for example, generally have far more control over employees than contract workers. If an employer tells someone exactly when and where to report to work and how to perform a particular job, that person receiving instructions may be an actual employee in the eyes of the law. Learn more about employment law by visiting our webpage.