Just like a manufacturing assembly line, the human resources department uses a process to find potential candidates, recruit qualified applicants, interview, hire and train the best person for the respected position.
Employee is a term used to describe the individual performing labor services in some form or fashion for an employer. It is the individual that is paid via direct and indirect compensation to provide such services. In general, the employer manages the outcome of the services rendered.
When using the term employee, it does not refer to subcontractors. The key difference is the level of control over the services rendered. Management can exercise a high level of control over employees.
A long standing custom in the hair salon industry is owners of salons leasing out booths to hair stylists. If not properly documented and exercised appropriately, the owner opens the door for many legal issues. Booth rental has both legal and IRS compliance issues that need to be addressed. Booth rental is legal in many states but you must adhere to several contractual compliance requirements to completely separate your salon from the renter.