Two engagements, two record shapes
An employee is a person your business directs and pays. The record is about the individual: contact details, emergency contact, pay basis, availability, internal role. It is sensitive, and only owners and administrators should be able to open it.
A subcontractor is an external business you contract with. The record is about the counterparty: the trade it covers, the rates agreed, the certificate of insurance, the license, the W-9 status you were given, and the jobs it has been assigned. Its most important fields are documents and their expiry dates.
What only appears on the subcontractor record
- General liability and workers' compensation certificates, with expiry dates.
- Trade license numbers and the jurisdictions they cover.
- Agreed rates or unit pricing, separate from your internal labor cost.
- Scoped access to only the jobs the sub is assigned to.
What only appears on the employee record
- Personal contact and emergency contact details.
- Pay basis and internal cost rate used for job costing.
- Availability, time-off balance and attendance history.
- An application role granting access to internal modules.
The classification line is legal, not technical
How you classify a worker is determined by law and by the facts of the relationship — direction, control, tooling, exclusivity — not by which record type you clicked. Software cannot decide it for you, and no software should imply it has.
What software should do is make the consequences of your decision consistent: employees appear in labor hours and internal access, subcontractors appear in document compliance and scoped external access. If your system blurs the two, your reporting blurs with it.
The failure this prevents
The common failure is a subcontractor recorded as staff. The insurance certificate has no home, so nobody sees it lapse. The sub shows up in internal directories and gets more visibility than the contract ever granted. And their cost lands in labor rather than in subcontracted work, quietly distorting margin on every job they touch.