In addition, employers do not supervise a contractor’s work as they would monitor an employee’s performance, nor do they usually provide the supplies or tools the contractor needs to complete its tasks.
In contrast, employers can exercise a higher degree of control on their employees. This includes not only the jobs employees perform but also the processes and tools they must use to complete them.
There are also compensation differences between the employer-contractor relationship and the employer-employee relationship. A contractor’s claim for compensation is tied to its ability to meet the expectations of its contract. It is possible for an employer to refuse compensation to a contractor that fails to deliver the services it was hired to provide. On the other hand, an employer’s ability to refuse paying employee wages is limited and often illegal.
Nevertheless, there are some exceptions to the general rule regarding degree of control.