WHAT IS AN EMPLOYEE?: CONTRACTOR VS. EMPLOYEE (W2) –
ANCUR Business Mentorship
I wanted to make sure everyone understands Contractor Vs. Employees (W2) Status & Difference in the United States. To know the difference between a Contractor vs. Employee READ ON! Sometimes we as Corporate sponsors want to give work directions, benefits, set work times, and training to Contractors.
Don’t!!
- W2 Employees get these work directions, benefits, set work times, and training because companies pay the person’s taxes
- Contractors DON’T get these benefits because no taxes are paid by the company
In the US there is a clear legal distinction between a contractor and an employee.
- An Employer (COMPANY) violates US Labor law when we cross that line and treat contractors as W2 employees.
According to US Labor law:
Contractors are fully responsible:
- work process
- the exact time period
- tools of their work
- TAXES
- Companies are responsible:
- Setting the final product requirements (KEY PERFORMANCE INDICATORS)
- Work Site/Conditions
- Pay for the final product to the Contractor.
- Companies are responsible:
Companies with W2 employees are fully responsible:
- Work process
- Exact time period
- Required work tools
- Benefits
- Workman’s Compensation Insurance
- Taxes
- Training
- Pay
Case in point: You our Beloved clients don’t tell us as CONTRACTORS (ANCUR) how to do Accounting, Bookkeeping, or Business setup. We just give you Great taxes, Clean books, and a Wonderfully complete business!!
PRO TIP: A company that treats a contractor as an employee can and will get fined by the US government for TAX EVASION.
If you have questions? 1f91a_raisedbackofhand Let’s all avoid the “Tax Evasion Trap” by properly classifying and treating workers in the right category!! ALWAYS YOURS!!
If you have any specific questions or concerns regarding worker classification or related topics, it’s advisable to consult legal and tax professionals who can provide guidance based on your specific circumstances and local regulations. www.ancur.biz