Project-based contract agreements are made between businesses and independent contractors. Project-based workers usually have a limited time frame for their work with a company. They are not referred to as employees, who typically don’t have an end date for their position.

Understanding the difference between an employee and an independent contractor will go a long way in helping you develop your business.

With an employee, you can:

• Set the number of hours they work.
• Provide them with office space.
• Define specific areas of their work.
• Limit the employee’s work to your workplace.

By contrast, with independent contractors you cannot:

• Give them set hours.
• Tell them they can only work for you.
• Tell them exactly how to perform their job.

To underscore the difference between a contractor and an employee, project-based contracts often contain a clause stating that nothing in the agreement will be interpreted as creating an employer-employee relationship.