By Lane V. Erickson, Attorney
There is a difference between an employee and an independent contractor under both federal and state law. Under applicable laws, an employee qualifies for protection and is guaranteed a certain minimum wage and possibly overtime pay. On the other hand, an independent contractor does not enjoy these protections but is entitled to receive the terms and conditions of his contractual agreement. The reason for this is that the independent contractor is in a position to negotiate the terms and conditions of the contract, including how, when, and how much they will be paid. One of the main questions I am asked by my clients is whether a person is an independent contract or an employee.
An independent contractor is a person who retains control of the job that is to be done. The best example that can be given is that of building a house. In this scenario there is usually a general contractor who agrees with the home buyer to build a certain home, in a certain location within a certain amount of time. This general contractor often hires subcontractors to complete specific types of jobs on the home such as installation of the plumbing or the electrical wires. A subcontractor is nothing more than an independent contractor.