We studied the tax treatment of both employees and independent contractors. I noted the employer's obligation to remit payroll taxes ( approx 7%) of its employees' salaries to the federal government to pay for Social Security and Medicare. By contrast, independent contractors must remit the entire amount ( 15%) due. I then discussed the role of the employee handbook and employment at will, noting how the handbook may impose contractual obligations on the employer, for example prior to termination of an employee, thus modifying the "at will " concept. Last, we discussed employee references and the legal pitfalls inherent in making a reference .