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Differences between independent contractors and employees?

Missouri residents may be interested to learn what the main differences are between employees and independent contractors under the law.

The biggest difference is control. For the most part, employers are entitled to control their employees under the terms and conditions of their employment. This does not apply to independent contractors, although those companies that hire the ICs are in charge of the project itself and essentially are the "clients" of the ICs. However, their control does not extend to the ICs themselves.

There are pros and cons for being both an IC and employee. Employees have more legal recourse available to them through laws like the Fair Labor Standards Act, a federal law that the Department of Labor enforces. Various state agencies offer workers' compensation and unemployment compensation to employees, while ICs are ineligible for these benefits.

Independent contractors are not guaranteed to be paid minimum wage or overtime or be provided with employee benefits. Employers are not responsible for withholding taxes for ICs or paying into Social Security for them.

It's not true that independent contractors have no legal options available to them. For instance, pending legislation such as the Employee Misclassification Prevention Act, if passed, will likely be the first federal statute to define the relationship disparity between employees and ICs. The United States Department of Labor is pushing its Misclassification Initiative to penalize those employers who deliberately misclassify their employees as ICs in order to deny them rights or benefits.

One shady trick of businesses is to hire workers as independent contractors according to terms of their employment agreement and then try to exert the control of an employer over them. ICs may struggle under these conditions, yet feel they have no options but to submit to the shoddy treatment and illegal misclassification so that they continue to earn money and get future referrals for more work.

If you are working as an independent contractor in Missouri and feel that you are being exploited and treated as an employee without any of the benefits, you may wish to consult with an employment law attorney.

Source: Employeeissues.com, "Independent Contractor vs Employee" Oct. 30, 2014

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