What is the difference between an independent contractor and an employee?

Very frequently, the difference between what constitutes an independent contractor and an employee is a very important distinction, especially if a company is being sued. In general, companies also owe more obligations to an employee than to an independent contractor, in terms of workplace rights. For instance, anti-discrimination laws only apply to employees, and not independent contractors; likewise, independent contractors are exempt from the Fair Labor Standards Act, so they are not subject to minimum wages laws or overtime pay laws. Further, the Family Medical Leave Act, unemployment insurance, workers compensation laws, Social Security contributions, and federal/state tax withholdings do not apply to independent contractors.