Independent contractors

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Updated: 4/11/2007 11:26 am
Independent contractors are workers who are hired on a one-time or job-by-job basis. They can include consultants, freelancers, or self-employed individuals. Companies often employ independent contractors when they need a specific skill or technical knowledge for projects that last a relatively short length of time. Independent contractors are usually given an outline of a project and a time frame for when it's to be completed. They, in turn, must determine how to accomplish it on their own schedule. Companies usually pay independent contractors based on their results rather than the time they put in. Under federal law, employers aren't required to treat independent contractors in the same manner as they do their full- or part-time employees. Consequently, employers aren't liable to them for paying payroll taxes, workers' compensation, or other benefits found under most labor laws. Independent contractors are also not entitled to federal minimum wage and overtime protections and generally must assume responsibility for their own taxes, insurance, and other benefits. Employers should be careful, however, when classifying workers as independent contractors. If independent contractors must work the same hours and perform the same job functions as full-time employees, they may be entitled to receive similar benefits. Keep in mind that some states require employers to validate an independent contractor's work status with a written agreement.
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