What distinguishes an independent contractor from an employee?

The distinction between an independent contractor and an employee primarily lies in the control and independence under which they operate. An independent contractor is considered to have greater autonomy, meaning they set their own methods and schedules for completing tasks. This level of control is crucial because it indicates that they are not subject to the same degree of oversight or direction from a hiring party as an employee would be.

Employees typically work under a company's guidelines and have their tasks, schedules, and workflow dictated by their employer. In contrast, independent contractors offer their services based on a contract and are responsible for how they achieve the results, which highlights their self-directed nature.

Understanding this distinction is integral to various legal and tax implications for both parties; thus, the nature of control is a fundamental aspect that clearly differentiates independent contractors from employees.