Definition of a Government Contract Employee

There is a difference between contractors and employees.

According to the Internal Revenue Service (IRS), there is a difference between a contractor and an employee. If a worker is an employee, the employer must withhold taxes from wages, but if the worker is under contract, he is considered as independent and is responsible for his own self-employment taxes.

Types

A government contract employee may either be employed by the government to fulfill a grant or contract, be employed by an independent contractor who has a contract with a government entity or be an independent contractor working with a government entity and, therefore, considered to be self-employed.

Temporary Government Employees

According to USA Jobs, government entities can hire temporary employees to fill needs (such as contracted obligations) that they expect to last one year or less. Temporary employees are covered by Social Security and unemployment but are not eligible for insurance and other benefits granted to full-time employees. These employees are also not eligible for life insurance or retirement benefits.

Employment by Contractor

Independent contractors bid on government contracts for goods and services and hire employees to do the work required. These employees are entitled to all the benefits that the contractor/employer normally extends to employees. According to the U.S. Department of Labor, government contractors must meet government criteria for wages and fringe benefits, must pay time and half for overtime and must provide safe and sanitary work conditions.

Employment as Independent Contractor

Independent contractors who are awarded contracts from government entities are self-employed. They agree to perform the conditions of the contract in exchange for predetermined compensation. Independent contractors control their own work hours and generally pay their own expenses. Details of the relationship are contained in a written contract.

References

• U.S. Department of Labor: Government Contracts
• IRS: Contractor or Employee
• Temporary Government Employees USA Jobs: Temporary Appointments

Resources

• Contract Work Hours and Safety Standards Act (CWHSSA)
• Copeland "Anti-Kickback" Act