Independent contracting in the United States
natural person, business, or corporation that provides goods or services to another entity under a contract or verbal agreement.
An independent contractor is a person, business, or corporation that provides goods or services under a written contract or a verbal agreement. Unlike employees, independent contractors do not work regularly for an employer but work as required, when they may be subject to law of agency. Independent contractors are usually paid on a freelance basis. Contractors often work through a limited company or franchise, which they themselves own, or may work through an umbrella company.
In the United States, any company or organization engaged in a trade or business that pays more than $600 to an independent contractor in one year is required to report this to the Internal Revenue Service (IRS) as well as to the contractor, using Form 1099-NEC. This form includes the money paid, contractor's name, social security number, address, phone number, and an indicator about the existence of foreign bank accounts; independent contractors do not have income taxes withheld like employees. The form has also led to use of the phrase "1099 workers" or "the 1099 economy" to refer to the independent contractors themselves.
Versus employee
The distinction between independent contractor and employee is an important one in the United States, as the costs for business owners to maintain employees are significantly higher than the costs associated with hiring independent contractors, due to federal and state requirements for employers to pay FICA (Social Security and Medicare taxes) and unemployment taxes on received income for employees. Likewise, employees are protected from being fired without cause, and if fired or let go for other reasons are entitled to unemployment benefits, whereas independent contractors have neither protection nor entitlement. Employees are also entitled to receive overtime pay for work performed over the 40-hour-per-week standard, whereas independent contractors may work any number of hours (including far above this standard) with no change in pay.
In the early 1990s, the IRS methodically began to look for employers who were misclassifying employees as independent contractors, and has since obtained billions of dollars in Social Security back taxes.
This brief starts where responsible research should: with the source description of “Independent contracting in the United States” as natural person, business, or corporation that provides goods or services to another entity under a contract or verbal agreement. Everything that follows is an evidence route, not borrowed authority.
Why this record matters
The subject matters to the general reference register because the source frames it as natural person, business, or corporation that provides goods or services to another entity under a contract or verbal agreement. Its deeper value depends on whether names, dates, institutions and citations support that framing.
The citation trail is more important than the brevity of the summary: it shows where individual claims can be examined in context. The source revision retrieved here is dated Aug 22, 2026. The linked authority identifier is Q42417097. The Library of Congress control number is sh85064847. 1 of 1 selected statements include explicit references; 1 carry qualifiers and 0 use preferred rank. The first chronological checks are 1099.
The absence of detail may reflect summary conventions rather than a lack of surviving documentation. The source lead contains qualifying language; that uncertainty should survive quotation, summary and reuse. Authority statements aid reconciliation but still require their own references, qualifiers and ranks to be checked.
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This entry incorporates text from “Independent contracting in the United States” on English Wikipedia. Contributors are listed in the page history. Text is available under the Creative Commons Attribution-ShareAlike 4.0 License. Selected authority identifiers and statements are retrieved from Wikidata under CC0; their references and qualifiers remain part of the verification path.