From the IRS website

Employees vs Independent Contractors


   Employees  Independent Contractors
  Control    The way they do their jobs, such as how, when and where is controlled by the employer     Have complete control over the way they do their work
  Supervision    Work under extensive supervision   Work unsupervised
  How Work is Done    Are given instruction as to how work should be done by their employer   Set own hours and structure how they do their work
  Training   Trained by their employer or other experienced employees   Not trained by the employer
  Pay   Paid a set amount on set dates   Paid by the job and pay their own expenses
  Benefits   Offered benefits such as medical, dental, etc.   Do not receive benefits from employer
  Taxes   Taxes (social security, Medicare, income) withheld from paycheck   Responsible for paying own taxes
  Supplies   Provided with supplies such as computers, paper, pens, etc.   Responsible for obtaining and paying for their own supplies


You have less control over workers:  Employees can be closely supervised and monitored, independent contractors can decide how best to do the task for which you hired them

You may be liable for injuries an IC suffers on the job:  Employees who are injured on the job are usually covered by workers' compensation insurance. In exchange for the benefits they receive for their injuries, these employees give up the right to sue their employer for damages. ICs are not covered by workers' compensation, which means that if they are injured on the job, they might be able to sue you and recover damages.

Instructions to workers: Employees are required to follow instructions on when, where, and how work is to be done. This is a very important factor.

Job training:  If your company provides or arranges for training of any kind for the worker, this is a sign you expect work to be performed in a certain way; therefore, the worker is your employee. Independent Contractors cannot be required to attend meetings or work along with someone who's more experienced.

Personal performance of services: An independent contractor has the freedom to hire assistants or subcontract work to other workers 

Sequence of work: Employees are required work in specific order or sequence, Independent Contractors choose their own.

Behavioral Control: The business has a right to direct and control what work is accomplished by its employees and how the work is done, through instructions, training, or other means.  Independent Contractors cannot be trained by the hiring company