Understanding the difference between an employee and an independent contractor is crucial, as it can significantly affect your rights, responsibilities, and legal obligations. Here’s a quick guide to the differences:
An employee:
- Works for your business as part of your team
- Has an employer who decides how, when, and where work is performed
- Uses tools and equipment supplied by the employer
- Receives regular wages or a salary
- Is entitled to annual leave, sick leave, and other paid leave entitlements
- Is generally protected from risks and liabilities, which are borne by the employer
A contractor:
- Runs their own business and provides services to clients (including your business)
- Decides how and when to complete their work
- Typically provides their own tools and equipment
- Is paid per job or project, usually for a specified outcome
- Bears the commercial risks associated with their work
Why does this matter?
Misclassifying a worker can have serious legal and financial consequences for both businesses and individuals.
If you’re unsure, it’s important to seek advice to ensure you’re meeting your obligations under all applicable workplace laws.
Need expert guidance? Miller Harris Lawyers will help you navigate your workplace relationships with confidence.