What is an Employee? Definition and Overview
An employee is an individual who works under the direction and control of an organization or person. This means that the employer has the authority to define not only what tasks are performed but also how, when, and where the work is carried out. Employees usually have assigned roles, fixed working hours, and are expected to follow company-established procedures and expectations.
In addition to completing their assigned tasks, employees may receive structured training, be reimbursed for business-related expenses, and be eligible for various job benefits, including vacation pay and sick leave. It’s important to distinguish employees from independent contractors, while both provide services, contractors usually maintain more autonomy in deciding how to accomplish their work.
Additional Details About Employees
Employees can fall into two broad categories: exempt or nonexempt from overtime rules. Their compensation might be hourly, daily, or salaried. Regulatory bodies such as the U.S. Department of Labor and the IRS each have criteria to determine a worker’s employment classification.
To handle payroll and tax responsibilities accurately, many companies use tools like Beyond. This type of software simplifies the payroll process by calculating wages, automating tax withholdings, and reducing administrative errors.
Employers typically have more control over employees compared to independent contractors, but with that control comes additional legal and financial responsibilities. For instance, employers must withhold income and payroll taxes for their employees, whereas independent contractors manage their own tax obligations.