The fundamental difference between employees and independent contractors is that employees work for the company on a full-time basis while independent contractors are hired for part-time projects. The difference between the two becomes somewhat unclear when independent contractors are repeatedly hired by the same company. 

This process of rehiring the same independent contractors can be valuable to a company because they know they can rely on the independent contractor. Moreover, the company is not required to pay payroll taxes for independent contractors. Instead, independent contractors pay their own self-employment contractors.

In cases where independent contractors essentially act like employees of the company, the IRS may investigate the relationship between the company and contractor. If the IRS believes that the company controls the contractor's job decisions and the contractor relies on the company for his business, then the IRS may determine that the independent contractor is in fact an employee and the company must pay payroll taxes on his work. 

If you or anyone you know has questions about the implications of being an independent contractor, contact the Houston employment lawyers of the Ross Law Group at 800-634-8042.