An independent contractor usually provides goods or services to another entity under terms specified in a contract agreement. Independent contractor is different from an company employee, an independent contractor does not work regularly for an employer but works as and when required and are usually paid on a freelance basis.
Independent Contractor Agreement
Independent contractor agreement has a profound impact on the pay, conditions and performance of the independent contractor itself. Before you sign any independent contractor agreement, it is important to know the status of the relevant parties. Independent contractors work for themselves — they are treated as if they are running their own business. Independent contractors control the performance of the work based on their experience, special license, or special education or training required for the job. Sometimes, it is not a straightforward matter to determine who is an independent contractor and who should be classified as an employee. To make a determination, the IRS advises taxpayers to look at three aspects of the employment arrangement: financial control, behavioral control, and relationship between the parties.
Independent contractor agreement enables the contractor to perform the tasks and contract on their own decisions. Generally speaking, independent contractors retain control over their schedule and number of hours worked, jobs accepted, and performance of their job. In most cases, the employer tell them the outlines of the project that needs to be done and the due date, and they determine how to accomplish it, on their own schedule. This contrasts with the situation for regular employees, who usually work at the schedule required by the employer and whose performance is directly supervised by the employer.
Independent Contractor Relationship with Employer
The independent contractor agreement need to clearly show the relationships between the employer and the contractor. After the independent contractor and employer relationship is clearly defined, an contractor agreement can be drafted, A key provision in an agreement is to describe what the independent contractor is doing for the company and specify how much will be paid. Independent contractors may be paid by the hour, by the job or by performance.
Independent Contractor Agreement Template
When creating your own independent contractor agreement template, you need to consider the job, the payment, relationship between the parties, responsibilities and liabilities and the job duration. an independent contractor agreement template usually has three parts.
The first part of independent contractor agreement template is details of jobs or service to be agreed on. In this part, the agreement need to have details of the job that need to be performed and the pay and payment methods. For example, the payment may be issued based on the job schedules or other standards.
The second part of independent contract agreement template is relationship between the two parties. In this part, you need to clearly state the relationships between the independent contractor and the owner. For example, you can state: The parties intend that an independent contractor-employer relationship will be created by this contract. Owner is interested only in the results to be achieved, and the conduct and control of the work will lie solely with contractor. Contractor is not to be considered an agent or employee of owner for any purpose, and the employees of contractor are not entitled to any of the benefits that owner provides for owner’s employees.
The last part of the independent contractor agreement template is about liabilities and duration of the contract. In this part, you need to state the liabilities and duration of the contract and state clearly which parties will hold the liabilities for risks and responsibilities.