nonemployee

A nonemployee is a person who provides work or services to an organization but is not classified as an employee. The term is often used in labor, tax, and contracting contexts to distinguish individuals who work under a contract for services from those who work as employees.

Typically, nonemployee work arrangements feature control by the client or hiring party over the outcome rather than day-to-day supervision, the contractor supplies their own equipment or tools, and the relationship is framed by a contract for services rather than an ongoing employer-employee relationship. The worker usually bears financial risk and may set or negotiate rates and schedules.

Tax and legal treatment differs: in many jurisdictions, nonemployees are responsible for paying their own income taxes and social contributions; in the United States, payments to nonemployees for services are common through forms like 1099-NEC and may require self-employment tax. They generally do not have payroll withholding, employer-provided benefits, or protections under most employment laws, though some labor standards may apply depending on jurisdiction and contract.

Classification as a nonemployee has legal and financial implications because misclassification can lead to penalties for the hiring party and loss of rights for the worker. Where the line between independent contractor and employee is unclear, courts or regulators may examine factors such as control, financial independence, and permanence of the relationship.

Common examples include freelancers, consultants, independent contractors, and gig workers who provide specialized services on a project basis.