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A person working for somebody else, for wages or salary, rather than working on their own account and selling their product or services. An employee has a contract of employment, and employers are liable for damage caused either by or to employees in the course of their duties. In the UK employers are required to collect income tax and National Insurance contributions from employees liable to them. Similar legislation exists in many countries. Self-employed workers are responsible for their own insurance and for their tax and National Insurance payments.

Reference: Oxford Press Dictonary of Economics, 5th edt.