What You Need to Know About Contractors vs Employees

But, if you’re ready to own your work schedule and take control of your career, it might be time to leave your safe space for the healthy challenge that is contracting. Here are the main differences between contract, part-time and full-time employees, and what employers need to know about hiring each. Furthermore, if you offer a contract employee a longer plan, and they are only with the company for a few months, you may cover their health insurance even after they have stopped working for your company. Weigh the pros and cons carefully before providing health insurance for your contract employees.

contract position vs full time

Another option for IT professionals is regular, full-time, benefits eligible employment. This means an employee is hired by a company to work for a minimum number of hours contract position vs full time per week at a set rate. Full-time employees earn a steady income and are provided benefits like health insurance, sick leave and retirement savings through their employer.

Don’t confuse W-2 contract positions with 1099 contract roles

Under the FMLA, most employees at companies with 50 or more employees are entitled to up to 12 weeks per year of unpaid, job-protected leave for certain family and medical circumstances. About one-third of U.S. states have state or local laws entitling employees to paid sick leave, and these laws usually include part-time employees and small employers. Lastly, contract workers must always be searching and preparing for their next contract position.

Unlike the old factory, it relies heavily on new kinds of work arrangements. If you use Square Payroll, you can pay 1099 employees by logging into the Payroll section of your online Square Dashboard or Square Payroll app and clicking Pay Contractors. From there you can record a payment that’s already been made or pay by check. While commission-based pay isn’t exclusive to 1099 employees, you may want to track commissions.


Once you’ve decided whether to hire employees or contractors — or both — you need to get familiar with the forms that the IRS requires you to submit for each type of worker. Trying to figure out the difference between independent contractors and employees and when to use 1099s and W-2s can be confusing and overwhelming. The FLSA defines exempt as executive, administrative, professional and outside sales employees and “certain computer employees,” who are paid a salary of at least $684 per week. Defining an employee as full time or giving them a related job title isn’t enough. Under most federal labor laws, including the Fair Labor Standards Act (FLSA), an employee’s full-time vs. part-time status is irrelevant.

  • You can typically expect to pay more upfront; however, keep in mind that contract workers are fully responsible for their own expenses, including all taxes.
  • This approach is all about presenting a meaningful and consistent job history, so focus on highlighting your most relevant accomplishments from each assignment.
  • These jobs occupy their very own place on the hiring spectrum and have both benefits and drawbacks for job seekers.
  • An employee, on the other hand, is on your team — you’re their supervisor, responsible for their behavior and also reporting their taxes.