Difference between an Employee and Independent Contractor
Courts use various tests to differentiate between an employee and independent contractor and such tests include a contract of service, control tests, multiple factor test and integration test. A contract of service means that the person has a contract of employment with an organization while a control test refers to the control exercised by the employer on employees. Independent contractors do not enter into a contract of agreement nor does the employer have control over them. Integration test means that the employee is an essential part of the organization, which is not the case in independent contractors (Klandermans, Hesselink, & Vuuren, 2010). Multiple factor test includes other factors such as wages and remuneration, dismissal and the right of suspension. An independent contractor does not experience such multiple factor tests.
The positive issues associated with being an employee include protection against unfair dismissal, notice rights, right to join labor and trade unions, the right to benefits and remuneration as well as industrial action and collective bargaining. Negative issues associated with an employee include ultimate control by the employer, entering into a contract of service and thus can b dismissed if the contract is not followed and following the directions of the employer at all times. The real issues associated with an independent contractor include freedom to perform their work since there are minimal control and ability to terminate the contract. Negative issues include lack of continuity since the relation ends with the completion of the contract. Independent contractors are also not protected by the employment relations act 2004 and thus cannot sue the employer on such grounds (Kalleberg, 2000). Risks associated with independent contractors include lack of protection since they do not belong to labor and trade unions.
References
Kalleberg, A. L. (2000). Nonstandard Employment Relations: Part-time, Temporary and Contract Work. Annual Review of Sociology, 26(1), 341-365. doi:10.1146/annurev.soc.26.1.341
Klandermans, B., Hesselink, J. K., & Van Vuuren, T. (2010). Employment status and job insecurity: On the subjective appraisal of an objective status. Economic and Industrial Democracy, 31(4), 557-577. doi:10.1177/0143831x09358362
