Independent Contractor Legal Meaning and Definition

Here is a simplified definition of the legal term Independent Contractor.

Independent Contractor (noun)

An independent contractor is a person or business that provides goods or services to another entity under terms specified in a contract or within a verbal agreement. Unlike an employee, this individual or entity has control over how the work is completed and is typically not afforded the benefits (e.g., health insurance, retirement plans) provided to regular employees. Furthermore, independent contractors are responsible for their own tax payments as it's not withheld by the entity they're working for. They decide when, where, and how to accomplish their work as long as it meets the contract's obligations. This type of arrangement can provide flexibility and potential profit margins for the contractor.