Here is an interesting article comparing the two:
The U.S. Internal Revenue Service has pretty clear rules (click HERE) on when someone must be classified as an employee rather than an independent contractor. Here are some of the indicators used:
· Does the person work on company premises? If so, it is much harder to classify them as an independent contractor.
· Is the person paid by their time, such as an hourly wage or weekly salary? Independent contractors are typically paid by their output, not their time.
· Is the person in control of their own schedule for completing work? If the schedule is dictated by the hiring business, the person is more likely to be classified an employee.
· Is the person using their own tools? If the tools the job requires are provided by the hiring business, the contractor is more likely to be classified an employee.
Retrieved from www.business.com