Employer vs. Employee: What’s the Difference?

What is an employer?

An employer is a person or business that hires an individual to perform work. An employer might be an individual, company, organization, government agency, institution or nonprofit organization. The employer pays an employee following employment contract terms.

Employers typically are expected to:

• Ensure a safe work environment

• Treat employees with respect

• Provide tools, equipment and other supplies needed by employees to do their job

• Pay employees the agreed-upon wages and benefits

• Give written notice or appropriate severance pay when an employee is terminated or laid off

An employer also may be responsible for providing benefit programs according to local, state and federal laws or union contracts. Benefits often include health insurance, 401(k) programs, personal time off, family medical leave, etc. The employer also holds the authority for any terminations or layoffs that occur in the workplace. In the United States, “at-will” employment means an employer can fire an employee without giving a cause as long as the reasoning is not discriminatory or otherwise illegal. Individual states may have specific rules about this process.

Employers are also typically responsible for hiring employees to work under contracts. A contract may be:

• Verbal: The employer and the employee verbally agree to the employment terms.

• Implied: The employer and the employee don’t verbally agree to terms, but they might suggest or infer employment terms without formalizing them in writing.

• Written: An employer, human resources professional and the employee will all typically sign and date employment terms.

Employers may hire employees as non-exempt or exempt. A non-exempt employee is typically paid for each hour worked. If they work hours beyond their shift, they may earn overtime, which is typically 1.5 times their normal wage. Non-exempt employees earn a set annual salary no matter how many hours are worked. This typically includes professional roles, administrative positions, executive jobs, and computer or outside sales positions.

What is an employee?

An employee is hired by a person or business to perform work for that person or business, also referred to as the employer. The Internal Revenue Service defines individuals as employees if the employer can control the work performed. Other factors that make someone an employee include:

• The person is on the company’s payroll and receives a specific salary or wage

• The individual is eligible for benefits and other perks offered by the employer

• A written or implied contract of employment

• The person is protected by law in terms of wages and employment rights

Employees typically are expected to:

• Personally do the work they are hired to perform

• Follow the employer’s instructions

• Abide by the employer’s rules and regulations

• Avoid putting themselves or others in danger

The common types of employees include:

• Part-time employees

• Full-time employees

• Seasonal employees

• Temporary employees

• Leased employees

Employer vs. employee roles

Employers and employees approach their workplace environment with different objectives. At times they may be closely aligned, and then be quite different at other times. Here are some ways their roles differ:

Authority

The employer has authority in the workplace. They assign work to employees, and they also might monitor productivity or individual work performance. The employer can also end an employee’s employment if they break rules set by the employer or fail to meet the standards expected at the time of employment.

An employee might have some authority in the workplace if they are operating as a manager or supervisor, but the employer is the ultimate authority in the workplace.

Goals

An employer’s goals are business-related and might include:

• The profitability of the business

• Improving and increasing productivity

• Hiring successful employees

• Maximizing operational efficiencies

An employee’s goals might simply include performing their job duties as assigned and earning their wages so they can achieve financial stability. In some roles, employees might have goals assigned to them as performance metrics. Most of these types of goals might involve projects or processes the employee can create. Examples of an employee’s goal might include:

• Complete a new certification

• Cross-train in a different department

• Improve performance metrics by a certain percentage

• Develop team-building skills

• Enhance the team website or intranet

• Create a department efficiency

• Complete training modules within a measured time frame

• Increasing productivity by a certain percentage

Dependence

Employers depend on their employees to perform specific tasks to help meet business goals, ensure the business runs smoothly and profits are made. On the other hand, employees depend on the employer to pay the agreed salary or wages, enabling them to financially support themselves and possibly their families.

If either the employer or employee feels the working arrangement is not satisfactory, they may choose to end the working relationship. The employer might decide to fire the employee or the employee may quit their job.

Income

Another difference between the employer and the employee is the direction of cash flow in the company or business. In simple terms, the employer offers pay and the employee receives it. For the employer, the salary is a deduction from the company’s income. For the employee, the salary is an addition to their finances.

Responsibilities

An employer’s work responsibilities are quite different from employees. Their duties usually include maintaining employees’ safety, ensuring employees are paid and that business goals are achieved.

Employees are also expected to promote their employers’ goals and visions. Their responsibilities include maintaining the confidentiality of sensitive information and not misusing company resources.

 

Indeed Career Guide