Contract workers, also known as “independent contractors,” “contract workers,” “freelancers,” or “hired workers,” are hired, or “contractors,” for a specific project or fixed term payment. Usually, contract workers are hired because of their expertise in a particular area, such as writing or drawing. Contract workers are usually hired for a temporary project to earn the agreed salary. They may receive a weekly, twice-weekly or monthly payment or when the project is completed. Instead of hiring a full-time, long-term employee with that knowledge, the company prefers to hire a contractor during work hours. These are not corporate employees but are self-employed and their business, whether a company with a limited liability, sole proprietorship or limited liability partnerships. They usually work for more than one company at a time.

Contract and full-time employees differ in many ways, including:

Benefits Full-time employees are eligible for benefits, such as health insurance and paid leave. Since contract workers are not hired companies, they do not receive benefits. They are considered self-employed and are responsible for their own insurance.

Company resources Full-time employees usually work in office spaces. Contract workers often work from home and provide their equipment such as computers, printers and equipment.

Hours Usually, full-time employees work a set number of hours on a fixed working day schedule. Contract workers often have more flexibility. They may choose their own hours and schedule as long as their product meets the needs of the company.

Taxes Contract workers are classified differently from internal employees by the IRS for tax purposes. Contract workers receive 1099 tax returns instead of W2 tax returns. Typically, companies provide contract employees with Form 1099-MISC for non-employee compensation.

Tax Full-time employees, especially those in full-time service, receive paid leave for the holidays and are generally sick, personal and leisure time. Contract employees do not act unless specified in their contract.

Disadvantages Types of staff and individual classification method There are many types of employees a company may employ based on budget, projects and workflow requirements. Here are the general categories of employees: