Definition: An employee is a person hired by another person (an employer) to perform a job. A worker is considered an employee if the employer controls what work will be done and how it will be done. What is important is that the company has the right to control and manage the details of how and when the work is performed.
The employer compensates the employee for his work, either through a specific wage or salary. This relationship between the employee and employer is established by a written or understood contract.
Employees are on the company payroll, and the employer withholds federal and state taxes, Social Security, and Medicare. Employees are provided with unemployment and workers' compensation insurance. Employees may be offered benefits like paid sick leave, vacation, health insurance, or 401(k) or other retirement plan participation.
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