HR and Employment Law Topics
Independent Contractors
National Summary
Employers frequently retain the services of independent
contractors (also referred to as consultants or freelancers) to assist
them during peak business periods, to work on special assignments,
and to perform services that are not part of the employer's regular
business. Employers do not pay employment taxes for independent contractors
and do not withhold federal, state, and local taxes from payments
made to independent contractors. Independent contractors are not included
in an employer's benefits programs, and they are not eligible for
unemployment insurance benefits. Independent contractors are also
exempt from wage and hour and employment discrimination laws. However,
problems arise when individuals who are truly employees are treated
by employers as independent contractors.
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