Converting a Contractor to an Employee: What Actually Changes
Conversion is not just administrative.
It changes the legal framework entirely.
Status Changes
The individual moves from an independent business relationship to an employment relationship.
This brings statutory protections and obligations.
Accrued Risk
Conversion does not eliminate past risk.
If the individual was misclassified, liability may still exist for the prior period.
Documentation Matters
New agreements must reflect the employment relationship clearly.
Old contractor terms cannot simply be carried forward.
The Practical Takeaway
Conversion addresses future structure.
It does not automatically resolve past exposure.