Types of workers

There are differing classifications of workers within a company. Some are part-time and Some are full-time and permanent and receive a guaranteed salary, while others are hired for short term contracts or work as temps or consultants. These latter differ from permanent employees in that the company where they work is not their employer, but they may work through a temp-agency or consulting firm. In this respect, it is important to distinguish independent contractors from employees, since the two are treated differently both in law and in most taxation systems. In the United States, employers are required to withhold income taxes, withhold and pay Social Security and Medicare taxes, and pay unemployment tax on wages paid to an employee. Employers generally do not pay or withhold payroll taxes on payments to independent contractors. [1]Many companies further classify employees as exempt or non-exempt. This designation is used to separate employees that are eligible for overtime from those that are not. An exempt employee is one that is typically salaried and is not eligible to earn overtime. Non-exempt employees are typically paid hourly and are eligible for overtime pay.


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