Are you having difficulty understanding the difference between an employee and an independent contractor in California? Employees are individuals who work for a business under a written or oral employment agreement or contract outlining their duties, compensation, benefits, and other conditions of employment. Independent contractors are individuals who work for themselves and provide services to a business under a contract. Determining whether a worker is an employee or an independent contractor in California can be complex. It’s very important for California businesses to correctly classify their workers, as misclassification can lead to legal and financial consequences. While employees are entitled to certain legal protections and benefits, independent contractors are considered self-employed and are responsible for their own taxes, insurance, and business expenses. If you’re not sure how your workers should be classified, or which test to use, contact an HR specialist or tax professional. Payroll Boutique offers HR Support services that can help you determine your worker's classification.