How Do I Differentiate Between an Employee and a Freelancer?

United States tax authorities have very definite ideas about who is and is not a freelancer, or "independent contractor." If you hire people to work regular hours at your office with your team, reporting to the same supervisors as your employees, the government may hold you liable for employment taxes for those workers. To avoid this, it's important to treat freelancers as truly independent. This means that you control the results of their work, but not when or how they get it done. You cannot control whether freelancers accept assignments from others, or what supplies or equipment they use. If you do need this kind of control, you need to set up an employer-employee relationship (with taxes withheld, and information provided on a W-2 form) instead of a straight freelance contract (with no taxes withheld, reported on Form 1099). Because businesses' needs vary, it's not unusual for freelancers to accept assignments as temporary or part-time employees depending on the client's needs.

Tags: freelancers, hiring

This entry was posted on Friday, October 17th, 2008 at 2:05 pm and is filed under Career Resources. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.