independent contractor
Definition
An independent contractor is a self-employed person you hire to do specific work, but who is not your employee. You control the result of the work but not how or when the person does it, which means you do not withhold taxes, provide benefits, or cover them under workers' compensation insurance.
Example
If you hire a freelance graphic designer to create your logo and she sets her own hours and uses her own computer, she is likely an independent contractor rather than an employee.
Watch Out
Misclassifying a worker as an independent contractor when they function more like an employee can result in serious penalties from the IRS and your state labor department.
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This definition is for informational purposes only and does not constitute legal advice. Please consult with a licensed attorney for legal guidance.