Difference between contract and employee

Based on Internal Revenue Service rules, what criteria distinguish a consultant from an employee?

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Jeff Lippold

  • Mar 26th, 2012

Answer is simple. A "contract" employee is working through a staffing firm and usually work short term specialty assignment. 6 to 9 month is average length of a "contract" employee. "Direct Hire/Perm" employees work for a company for entire duration of employment with company and may work and several different projects/assignments. "Direct" employees are eligible for benefits through employer. "Contract" employees may or may not be offered benefits through staffing firm. Many high level IT people prefer "contracts" as it keeps them in same type of projects and allows flexibility with job choice. Some "contract" employees proceed to direct hire at end of existing contract.

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