What\u2019s the difference between an independent contractor and an employee in the state of Arizona? Many employers in the state label their workers as independent contractors as a method to cut costs for the business. Many contractors receive fewer benefits and lower wages than they deserve due to this classification.<\/p>\n
For these reasons, it\u2019s important to understand the differences between an independent contractor and an employee. While independent contractors do have more freedom and supervise their own work, this classification comes with significant drawbacks.\u00a0<\/span><\/p>\n If your employer has subjected you to unfair treatment, an employment law<\/a> attorney might be able to help you get the compensation you\u2019re entitled to. The employer may also receive significant penalties and fines for misclassifying you.<\/p>\n Employers must pay half of each employee\u2019s Medicare and Social Security taxes. By classifying an employee as a freelancer or independent contractor, they can eliminate this burden and save money. Through this method, they ensure they won\u2019t need to cover unemployment insurance or worry about break pay, overtime, minimum wage, or sick pay<\/a>. However, businesses in Arizona must follow certain guidelines to determine whether a worker is a contractor or employee.<\/p>\n Here are some of the criteria that a person must meet to qualify as an independent contractor:\u00a0<\/span><\/p>\n This list isn\u2019t exhaustive as other factors can qualify someone as an independent contractor. If most of these factors aren\u2019t met, a worker most likely counts as an employee for federal and state tax considerations.<\/p>\n While being an independent contractor sounds great on the surface and you have some advantages, it also comes with unique consequences. Here are some to consider:\u00a0<\/span><\/p>\n Many workers are punished by an independent contractor status just because their employer is trying to cut corners and save money. Keep in mind that you should be officially considered an employee unless you\u2019ve declared your independent contractor status at work.<\/p>\n Contractors don\u2019t count as employees according to the FLSA (Fair Labor Standards Act<\/a>). As a result, they aren\u2019t entitled to the same protections and rights that an employee has. In return for receiving fewer benefits and protections, an independent contractor has more freedom to receive compensation outside of standard payroll and can decide their own hours.\u00a0<\/span><\/p>\n As a contractor, you have the right to organize and can join a union if you want to. Just keep in mind that unions for contractors most often won\u2019t have the same protections or privileges as employee unions.<\/p>\n When it comes to misclassification of independent contractors versus employees at work, there are several types of law to consider. Contract law, tax law<\/a>, and employment law may all impact the situation and each case has its own nuances to consider. As an employer, you may benefit from speaking with an employment law attorney. They can define the federal and state laws regarding what you need to know to ensure compliance.<\/p>\n If you think your employer misclassified you or you\u2019re unsure of your status and its consequences, speaking with an attorney can help you clear the issue up. They can help you go over your options for reclaiming lost compensation<\/a>, figure out your status, and help represent you if you go to trial for violating contract terms as an independent contractor.<\/p>\n Here are some of the most frequently asked questions on the topic:\u00a0<\/span><\/p>\n This depends on your business goals. If you prefer to be part of a team, to collaborate with others, and to have less responsibility in making operational decisions at work, employment is the better fit for you. If you want to have a brand, set your own hours, and work without someone overseeing your operations, an independent contractor position may work better.<\/p>\n If you\u2019re earning 1099 income, you\u2019ll owe self-employment taxes (such as Medicare and Social Security) on that income. Both employment wages and self-employment income will be considered until your maximum annual taxable amount<\/a> is reached.<\/p>\n An important factor to consider is how much you\u2019ll earn as a contractor versus your earning capacity as an employee. Independent contractors tend to earn a bit more than employees, but it comes at a cost. Employees often get benefits, paid vacations, and other perks, while contractors must figure out their own benefits. If you work with a staffing agency, however, you may receive insurance and other advantages as a contractor.<\/p>\n You deserve fair treatment at work, and that includes full compensation for the time you put in. An employer cutting corners by docking your pay in this way is both morally questionable and likely illegal. By working with an employment law attorney<\/a> in Arizona, you may be able to secure wages that your employer denied you. They may also be able to help you avoid paying more Medicare and Social Security taxes than you should\u2019ve been responsible for.<\/p>\nPoints to Keep in Mind Regarding Independent Contracting<\/h2>\n
Independent Contractor Criteria<\/h3>\n
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Consequences of a Contractor Classification<\/h3>\n
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What rights do I have an as independent contractor?<\/h3>\n
How Working With an Attorney Can Help<\/h2>\n
Frequently Asked Questions on Independent Contractors<\/h2>\n
Q: Is it more beneficial to be an employee or an independent contractor?\u00a0<\/span><\/h3>\n
Q: What taxes do I pay as a 1099 employee?<\/h3>\n
Q: Do contractors make more money than employees?<\/h3>\n
Need Help With Wage Disputes in Arizona?<\/h2>\n