Independent Contractor vs. Employee

As an INDEPENDENT CONTRACTOR, you may:

  • Not be protected by Family and Medical Leave Act (FMLA).
  • Not always be protected under safe workplace laws.
  • Not always be protected under civil rights laws.
  • Not be eligible for state unemployment benefits.
  • Not be entitled to minimum wage.
  • Not be entitled to overtime compensation.
  • Not be entitled to worker's compensation.

Additionally, an INDEPENDENT CONTRACTOR:

  • Must withhold your own federal, state, and local taxes.
  • Must submit quarterly estimated taxes to IRS.
  • Must fund your own retirement account.
  • Must fund your own health and liability insurance.
    • NOTE health and liability insurance rates are typically higher than group rates an employer can get for their employees.

As an EMPLOYEE, you are:

  • Protected by Family and Medical Leave Act (FMLA).
    • Eligible employees may take up to 12 weeks of leave and their job will be protected. Upon return from leave, the employee must be restored to the same job or nearly identical to it with equivalent pay and benefits.
    • While on leave, employers must continue health insurance coverage as if the employee was not on leave.
  • Protected under safe workplace laws.
    • Federal law entitles workers to a safe workplace. Your employer must keep your workplace free of known health and safety hazards.
  • Protected under non-discrimination laws.
  • Eligible for state unemployment benefits.
  • Entitled to receive minimum wage.
  • Entitled to receive overtime compensation.
  • Entitled to receive worker's compensation.

Steps to Classify a Worker

This website will guide you through Wisconsin’s worker classification laws. Select the appropriate law(s) to begin the process to evaluate how to correctly classify a worker as either an employee or independent contractor:

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