W-2 employees are different from independent contractors (1099 employees), as they typically have more job security, benefits, and are subject to wage and hour laws. Employers withhold taxes and contribute to Social Security and Medicare.

Practical Example of a W-2 Employee:

A marketing manager at a firm receives a regular salary, health insurance, and retirement plan contributions from their employer. Each year, they receive a W-2 form reporting their income and taxes withheld.

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