Or maybe you were hired as an independent contractor or freelancer to do work for a company. In any case, as a freelancer or independent contractor, you are not an employee. You are self-employed. Being an independent contractor seems easy, right? You just go to work and collect the money.
How are wages set for an independent contractor?
Generally, an independent contractor’s wages are set pursuant to his or her contract with the employer. These contracts often establish a deadline for completion of the work but do not contain set hours where the contractor is required to work on the employer’s job site.
Who is an independent contractor in the gig economy?
Independent contractors have become increasingly prevalent in the rise of what has been dubbed “the gig economy.” An independent contractor, or freelancer, is a person or entity contracted to perform work for—or provide services to—another entity as a nonemployee.
What are the characteristics of an independent contractor?
The key characteristic of an independent contractor is retaining control of how the work they’re being paid to do is performed. With that guideline in mind, there are a variety of careers that offer the ability to work as an independent contractor, such as: Independent contractor status can apply regardless of how your business is structured.
What are the benefits and drawbacks of being an independent contractor?
Working for others as an independent contractor has benefits and drawbacks. The benefits: You are truly independent. You can run your business the way you want, with no one telling you what to do. You get all of the profits of the business.
Do you get unemployment if you are an independent contractor?
As with unemployment benefits, an employer is not responsible for workers’ comp benefits if you are an Independent Contractor. But not so fast: Nowadays, some states and cities are offering benefits to Independent Contractors. I’ve recently seen unemployment insurance and workers’ compensation provided to Independent Contractors.
Are there penalties for misclassifying an employee as an independent contractor?
The penalties for misclassifying employees as independent contractors can be significant. You can avoid trouble by following these tips. (For more information on hiring independent contractors, including contracts you can use to set up the terms of the relationship, get Working With Independent Contractors, by Stephen Fishman (Nolo).)
