Employees and employers




An employee contributes labor and expertise to an endeavor of an employer or of a person conducting a business or undertaking (PCB) and is usually hired to perform specific duties which are packaged into a job. In a corporate context, an employee is a person who is hired to provide services to a company on a regular basis in exchange for compensation and who does not provide these services as part of an independent business.

An issue that arises in most companies, especially the ones that are in the gig economy, is the classification of workers. A lot of workers that fulfill gigs are often hired as independent contractors.  

As a general principle of employment law, in the United States, there is a difference between an agent and an independent contractor. The default status of a worker is employee unless specific guidelines are met, which can be determined by the ABC test. Thus, clarifying whether someone who performs work is an independent contractor or an employee from the beginning, and treating them accordingly, can save a company from trouble later on.

Provided key circumstances, including ones such as that the worker is paid regularly, follows set hours of work, is supplied with tools from the employer, is closely monitored by the employer, acting on behalf of the employer, only works for one employer at a time, they are considered an employee, and the employer will generally be liable for their actions and be obliged to give them benefits. In order to stay protected and avoid lawsuits, an employer has to be aware of that distinction.

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