Project Summary: Discussion: Independent Contractor or Employee? A basic understanding is needed for individuals who work for organizations to determine their means of compensation and benefits. Whether they are an employee of the organization or a contractor working for the organization creates a unique classification. As an HR practitioner, you must be clear about the differences, allowing you to classify each correctly and manage their relationship with the organization appropriately. This week, we will clarify the differences between these and examine what each means to the organization—to its benefit and to its limitations.