Employees are people that the company hires to be fully dedicated to work for your company. They can be either full time or part time, but the company owes a great deal of duty to them. The company needs to provide insurance, certain health and retirement benefits, and pay for their social security taxes. Employees are typically granted a company badge, work on site, enjoy company benefits and should be hired, supervised and fired through well thought out processes. On the contrary, contractors have a much “loose” relationship with the company. They typically work for more than one company, can do their work with a large amount of freedom and are easily terminated without giving much reason or notice. They typically use their own equipment and work from any location of their choosing. They don’t have any other benefits other than being paid by the company.
Employees can sue employers for multiple reasons
First step is to have a properly documented employee handbook and detailed job descriptions describing expected behaviors, standards and expectations for performance. Second, when an employee is not performing, have a properly documented process of communicating what areas need improvement and provide an opportunity to improve. The process needs to be fair and objective, and be free of bias, harassment and discrimination. Finally, when the employee is finally terminated, it’s good practice for the employer to present a document to sign to relieve all claims, obligations etc. in exchange of some kind of consideration, such as a severance package, extended benefits, etc.
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