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The distinction between independent contractor and employee is an important one in the United States, as the costs for business owners to maintain employees are significantly higher than the costs associated with hiring independent contractors, due to federal and state requirements for employers to pay FICA (Social Security and Medicare taxes) and unemployment taxes on received income for ...
An independent contractor is in business for him or herself providing services to other businesses and does not work for or under an outside authority. Independent contractors are contracted on a temporary basis and paid at the completion of a project upon which their contract will be terminated.
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The firm could, however, hire an independent contractor working as an electrician, interior decorator, or painter. This raises questions about the common practice of consulting, because a company would typically hire a management consulting firm or self-employed consultant to address business-specific needs that are not "outside the usual ...
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Cost-plus-incentive fee (CPIF) contracts have a larger fee awarded for contracts which meet or exceed certain performance goals, for example being on schedule and any cost savings. [1] Cost-plus-award fee (CPAF) contracts pay a fee based upon the contractor's product. An aircraft development contract, for example, may pay award fees if the ...
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