Employees v.s. Contractors

What’s the difference between employees and independent contractors?

Business owners are responsible for hiring an employee or independent contractor to complete construction-related tasks. Before recruiting a worker, understand the legal differences between the roles of employees and contractors. 


An employee is an individual who works at one company to complete internal jobs. They will decide the time and place of a job while receiving W-2 benefits. 

Independent Contractors

A contractor is self-employed or hired through a contracting firm — they outsource their expertise to different companies and locations for professional work. 


Employees and contractors complete similar jobs, but their differences make them more knowledgeable in certain areas. Internal employees have a broad understanding of their field. However, an independent contractor brings more specialized experience to their line of work. Contractors have an advantage against employees from their exposure to various job sites. 


State and federal labor laws protect internal employees. They also work to earn an hourly wage or salary based on their employer’s schedule. 

Federal employment or labor laws do not protect independent contractors. The contractor will provide their service rates and submit an invoice to the business once the job is complete. 


A manager will approve the quality and hours worked by an employee. If hiring an independent contractor, they are not to be treated as an employee. Contractors will determine their hours of work and whether or not they work onsight.

The differences between employees and contractors may appear minor, but they could alter how a job is completed for a business. At TCE Insurance, our experts will guide your business through this hiring process.