![]() ![]() § 152(3)) protects employees and union members from unfair bargaining practices Title VII of the Civil Rights Act of 1964 (42 U.S.C.A. The National Labor Relations Act (29 U.S.C.A. Labor RelationsĬongress and the states have enacted numerous laws geared toward protecting employees. Independent contractors may fund their own benefits, but not on a tax-free basis-whereas many benefits provided by employers to employees are, by law, tax free. One important disadvantage of working as an independent contractor is that standard employment benefits-such as health, life, dental, and disability insurance funded retirement plans paid vacation time and paid maternity or Paternity leave-are not available. Also, independent contractors must pay estimated taxes each quarter, whereas employees generally have taxes withheld from their paychecks by their employer. Yet independent contractors generally qualify for more business deductions on their federal income taxes than do employees. For example, an employee shares the costs of Social Security and Medicare taxes with his or her employer whereas an independent contractor is responsible for the entire amounts. ![]() The status of independent contractor carries with it many tax ramifications. Properly distinguishing between employees and independent contractors has important consequences, and the failure to maintain the distinction can be costly. The decision to hire or work as an independent contractor should be weighed carefully. However, there are drawbacks to the relationship as well. This working relationship is a flexible one that provides benefits to both the worker and the employer. A person who contracts to do work for another person according to his or her own processes and methods the contractor is not subject to another's control except for what is specified in a mutually binding agreement for a specific job.Īn independent contractor contracts with an employer to do a particular piece of work. ![]()
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