Question

Compare and contrast the classifications of employees or independent contractors. Assess why it is important to classify workers correctly.

Answer 1

Employees and independent contractors -

Contrast -

1. Employment laws, labor law, and Medicare facilities don't apply to the independent contractor whereas it applies to the employees.
2. Employees earn their salary based on their employment terms. On the other hand, independent contractors work based on hourly, weekly or monthly rate and they get their contract payment after the completion of their work.
3. Employers provide work facilities to the employees whereas independent contractor gets their own work as they have special expertise.

Compare -

1. In case of tax deduction, employees has social security number whereas independent contractors has tax identification number.
2. Employees mostly interact with human resource department and independent contractor mostly contact with that department which needed the service.

The main reason to classify the workers is because of the employment laws that means for the taxation and employment benefits. There are certain employment laws which are not for the non-employees or the independent contractors.

Hope this helps :)