Employees vs. Employers: What's the Difference?

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A guide to employees, employers, and what they both do
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In the workforce, some people are employees and others are employers. If trying to figure out the difference between employees and employers has you scratching your head, we’re here to help. In this article, we’ll tell you what these 2 individuals are and how their responsibilities, level of authority, and goals are different. Read on to learn more!

Things You Should Know

  • An employee is someone who works for a company, institution, or another individual.
  • An employer is the company, institution, or individual that an employee works for.
  • The employee’s main job is to perform their duties and follow their employer’s rules, while the employer has to pay them and maintain a safe workplace.
Section 1 of 4:

Employee vs. Employer

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  1. Employees are people hired by an employer, or a business, to perform specific jobs. For example, you might be employed by Target, Apple, or Netflix. So, an employer is a company or institution that hires an employee. The employee’s primary responsibility is to perform the duties the employer gives them, while an employer’s job is to pay the employee and give them a safe, respectful place to work. [1]
    • Employers are different from bosses. An employer is a company, while a boss might be a manager who works for the company. [2]
    • For example, you might work at Starbucks and report to your manager Jess. Starbucks is your employer while Jess is your boss.
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Section 2 of 4:

What is an employee?

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  1. Employees are hired by an institution to do a specific job and in turn, are paid for their labor. They enter into a contract with the company and agree to perform the duties the company expects from them. [3] The contract also protects employees from being discriminated against and gives them a right to safe working conditions. [4]
    • Most employee contracts are either written or verbal. A company might provide you with a document of what they expect from you or tell you their expectations. [5]
    • Some employee contracts are implied. This refers to behaviors and words that imply that you and the company agree to the terms they laid out.
    • Employees are often offered additional benefits for their labor like health insurance, paid time off, sick leave, and retirement savings.
    • An employee's compensation is usually classified as nonexempt or exempt. Non-exempt employees get paid extra when they work more than 40 hours a week, while exempt employees don’t. [6]
  2. When you think of an employee, you’re likely thinking of a permanent employee. They get all the rights and benefits offered to them by the company and are responsible for all their duties. On the other hand, temporary or fixed-term employees finish their duties by a set date and are then released from their employment contract. [7]
    • Employees can either work full-time or part-time. Generally, full-time employees work longer hours than part-time workers, but the specific hours are decided by the company. [8]
    • Contract workers might sound like employees, but they’re actually not. An independent contractor gets paid by a company, but they only agree on the end result of their work. The company that hires them doesn’t control what they do or how they do it. [9]
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Section 3 of 4:

What is an employer?

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  1. The employer, who can be a single person, government agency, educational institution, or non-profit business, enters into a contract with an employee and dictates their duties and how they do them. In exchange for the employee’s work, the employer pays them and might offer them additional benefits. [10]
    • For example, if you own your own business and hire people to work for you, you are your employees’ employer.
    • Employers are also in charge of terminating employees. Most employers are at-will, meaning they can fire an employee at any time and for any reason, as long as it’s not based on discrimination or another illegal reason. [11]
    • Likewise, employees are at-will and can also quit at any time for any reason without consequence.
Section 4 of 4:

Differences Between Employees and Employers

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  1. An employee’s main job is to perform the duties they were hired to do according to their employer’s instructions and rules. The employer is then responsible for giving their employees a safe, accommodating, and respectful place to work. They are required to pay their employees for their labor and give them all the tools, supplies, and education they need to succeed. [12]
    • For example, an employer might expect their employee to clock in at 8 am and keep the information they work on private. If they don’t, the employer can discipline them.
    • Employees are also responsible for keeping themselves and their coworkers safe. They agree to follow the employer’s safety regulations and treat other people kindly.
    • Employees : If your employer fails to uphold their responsibilities, talk to your company’s Human Resources department about the issue. If that doesn’t resolve your problem, file a complaint with the U.S. Department of Labor or the Equal Opportunity Employment Commission.
    • Employers : Set up a private meeting​​ to talk to an employee who’s performing poorly. Express your concerns honestly and kindly and provide them with solutions that will help them get back on track.
  2. Employers are in charge of employees. They set their employee’s general job duties, pay, and direct what they work on each day and how they get it done. While employees are often in positions of power, like bosses, supervisors, and department heads, they ultimately have an employer that directs how they manage and oversee the employees underneath them. [13]
    • Employees : If you have dreams of working your way up a company, show your employer that you’re dedicated to your job and ready to work hard. You might ask to help on new projects and volunteer to train new employees.
    • Employers : Being a good employer is all about showing your employees that you’re friendly, approachable, and respectful. Even though you're in charge, let your employees know you’re open to criticism and making the workplace even better.
  3. Employees typically have goals that are directly related to their performance and duties. They might work towards finishing a specific project, improving their performance to get a raise, or getting a certificate or license that helps them win a promotion. [14] Employers typically have over-arching goals related to the company’s performance and success. Most companies want to maximize their profits, so they motivate their employees to be as productive and efficient as possible. [15]
    • Employers usually have goals for growing and expanding the company, which typically involves hiring and training new employees.
    • Employees : Set goals that are specific and easy to tackle. If you want to improve your time management, set a goal to write to-do lists, prioritize the most important tasks, and work on one thing at a time.
    • Employers : Get feedback from your employees to help grow your business . Ask them what’s working for them to ensure they’re happy and fulfilled at work. If something isn’t working, meet with your employees to find solutions.
  4. Employers and employees have a reciprocal relationship and rely on each other to get work done. An employer depends on their employee to do the duties they’re assigned and to uphold the company’s goals, which ultimately helps the company succeed. Likewise, an employee counts on their employer to pay them and provide them with other perks to keep them motivated. [16]
    • When you’re self-employed, you’re your own employer and employee. If you’re interested in being self-employed, put your bright idea onto paper and write a business plan that details your company and product.
    • Employees : Stay motivated at work by taking short breaks throughout the day. When you finish a big project or difficult task, reward yourself with a special treat.
    • Employers : Encouraging your employees to learn and grow helps keep them motivated. Provide them with clear, specific training documents and give them opportunities to take workshops that keep their skills sharp.
  5. Employers pay their employees using the profits they generate as a business. So, the company loses income as its employees gain it. Luckily, employers plan ahead and know how much they need to earn and pay their employees to keep their profits positive. [17]
    • Employees : If your employer is doing well and you think you deserve more money, ask for a raise . To build your case, look at what other companies offer for your position and think of the ways you go beyond your duties.
    • Employers : Acknowledge your employees’ hard work. Simply popping into your employee’s office when they give a stellar presentation or rewarding your team with monthly pizza lunches helps keep them happy and motivated.
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Expert Q&A

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  • Question
    How can I be a good employer to my employees?
    Jay Goninen
    Automotive Expert
    Jay Goninen is an Automotive Expert and the Co-Founder and President of WrenchWay. Jay started working in his family's repair shop when he was nine and has been deeply passionate about the industry since then. He has experience as a technician and is currently a Board Member for both the Diesel Technology Program at Madison Area Technical College and the Community Alliance for the Skilled Trades.
    Jay Goninen
    Automotive Expert
    Expert Answer
    Prioritize communication and transparency. Provide clear expectations, regular feedback, and growth opportunities. Foster a positive work environment that values diversity, inclusion, and respect. Offer competitive compensation and benefits, along with recognition for achievements. Support work-life balance and provide resources for employee well-being. Encourage collaboration, teamwork, and empowerment. Continuously invest in employee development and training. Listen to employee feedback and address concerns promptly. By prioritizing the needs and satisfaction of your employees, you can cultivate a supportive and productive workplace culture.
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  • Question
    What questions should I ask an employer before hiring?
    Jay Goninen
    Automotive Expert
    Jay Goninen is an Automotive Expert and the Co-Founder and President of WrenchWay. Jay started working in his family's repair shop when he was nine and has been deeply passionate about the industry since then. He has experience as a technician and is currently a Board Member for both the Diesel Technology Program at Madison Area Technical College and the Community Alliance for the Skilled Trades.
    Jay Goninen
    Automotive Expert
    Expert Answer
    When preparing for an interview, consider asking questions about the work hours, overtime expectations, and weekend availability. Inquire about the benefits package, including health insurance coverage and available benefits. Seek clarification on paid holidays and the company's policy regarding time off. As you progress in your career, these factors become increasingly significant. Therefore, understanding these aspects can help you make informed decisions about the role and its alignment with your priorities and needs.
    Thanks! We're glad this was helpful.
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      References

      1. ↑ https://educaloi.qc.ca/en/capsules/rights-and-responsibilities-of-employers-and-employees/
      2. ↑ https://alohainternationalemployment.com/employers-name-meaning/
      3. ↑ https://www.law.cornell.edu/wex/employee
      4. ↑ https://www.eeoc.gov/employers/small-business/employee-rights
      5. ↑ https://edd.ca.gov/en/uibdg/Preface_PR_15/
      6. ↑ https://www.shrm.org/resourcesandtools/tools-and-samples/hr-qa/pages/exempt-nonexempt-salaried-hourly-definitions.aspx
      7. ↑ https://www.employment.govt.nz/starting-employment/who-is-an-employee/types-of-employee/
      8. ↑ https://www.dol.gov/general/topic/workhours/full-time
      9. ↑ ​​ https://www.irs.gov/businesses/small-businesses-self-employed/independent-contractor-defined
      1. ↑ ​​ https://www.law.cornell.edu/wex/employer
      2. ↑ https://www.ncsl.org/labor-and-employment/at-will-employment-overview
      3. ↑ https://educaloi.qc.ca/en/capsules/rights-and-responsibilities-of-employers-and-employees/
      4. ↑ https://www.bls.gov/opub/mlr/2002/01/art1full.pdf
      5. ↑ https://hbr.org/2011/02/making-sure-your-employees-suc
      6. ↑ https://www.umassglobal.edu/news-and-events/blog/how-to-measure-organizational-performance
      7. ↑ https://educaloi.qc.ca/en/capsules/rights-and-responsibilities-of-employers-and-employees/
      8. ↑ https://online.hbs.edu/blog/post/cash-flow-vs-profit

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