Understanding the difference between independent contractors and subcontractors can help with managing work and responsibilities. Both types of workers are not traditional employees, but their roles and how they operate differ.
Independent contractor responsibilities
Independent contractors work for clients directly, taking on projects or tasks in their own way. They control how they do the work as long as they meet the agreement set by the client. These workers usually manage their own schedules and use their own tools and resources. Examples of independent contractors include freelance writers, consultants, or builders who deal with clients themselves.
Independent contractors pay their own taxes, including self-employment tax, and usually don’t get benefits like health insurance from the client. They can work for more than one client at a time, which gives them freedom, but they must carefully manage their money.
Subcontractor responsibilities
Subcontractors, however, receive work from other contractors to do part of a larger project. They don’t deal with clients directly and must follow the main contractor’s rules and timelines. Subcontractors often specialize in specific work like plumbing, electrical, or flooring and a general contractor hires them for these jobs.
While subcontractors also work independently, their tasks come with clear directions from the contractor. Their focus stays on the part of the job they need to complete, and they report to the contractor instead of the client.
Key differences
The biggest difference between independent contractors and subcontractors lies in who hires them. This difference changes the amount of control they have over the job and how they manage their work.
Knowing the difference helps ensure that both employers and employees correctly classify workers when they draw up construction contracts.