What distinguishes an employee from an independent contractor?

The distinction between an employee and an independent contractor generally hinges on the level of control and direction exercised by the employer over the worker. An employee works under the direction and control of an employer, meaning that the employer has the authority to dictate how tasks should be completed, when they should be done, and often provides the tools and resources necessary for those tasks. This relationship is characterized by a degree of permanence and ongoing relationship with the employer, which includes benefits such as health insurance, retirement plans, and other forms of employee compensation.

In contrast, independent contractors operate with greater autonomy. They typically determine how to accomplish their work, often using their own methods and tools, and they may serve multiple clients simultaneously. This independent status is what sets them apart from employees, who are integrated into the organization’s structure and workflow.