An independent contractor is an individual who is in charge of his or her own business. Independent contractors earn their living from their businesses rather than from their employers. At times, they are referred to as consultants, business owners, freelancers, self-employed or entrepreneurs. While an employee works for one employer, an independent contractor usually works for several clients, and works on various projects that require specialized knowledge. Under federal law, whether you are an employee or an independent contractor is dependent on the level of control the employer has over you, compared with the level of independence you have from your employer.
Some of the benefits of working as an independent contractor are as follows:
- You are working for yourself
- Your compensation exceeds that of other employees
- There is no withholding of state or federal tax from your pay
- When you file your taxes, you can take business deductions
However, some of the disadvantages of being an independent contractor are:
- You will not have the security in knowing that you have a steady job
- There is a possibility that you will not be compensated in a timely manner, if at all
- You are required to pay self-employment taxes
- You may have personal liability for debts incurred by your business
- You have no benefits provided by your employer
- You will not benefit from unemployment insurance
- You will have no workers’ compensation provided by your employer
- You are entitled to few protections under labor law
Your rights as an independent contractor
As an independent contractor, you have the right to determine when, where and how to complete a certain project. While your client outlines the desired result of your work, you have the flexibility to decide how to accomplish that result.
However, independent contractors are not free to make all decisions concerning the assigned work. They are required to complete their assignments in a timely manner, and in accordance with the stipulations mentioned in the agreement with the client.
If you are an independent contractor, and would like a further explanation of your rights and responsibilities, call the employment lawyers at the Law Offices of Posternock Apell, PC PC.
The article above: (1) does not create or constitute an attorney-client relationship, (2) is not intended as a solicitation, (3) is not intended to convey or constitute legal advice, and (4) is not a substitute for personalized legal advice from a qualified attorney. You should not act upon any such information without first seeking qualified professional counsel about your specific matter.