Independent Contractor Agreement

Who Is An Independent Contractor?

An independent contractor is a person hired by a company to do a particular job. The company does not control how the job has to be accomplished. If the company is controlling how a job is to be accomplished by taking stock of various techniques used and implementation of methods and materials consumed, then the person hired is to be considered as an employee of the client.

In simple, a person who takes up a contract to work for another person according to his/her methods is called an independent contractor.

Characteristics Of An Employee

When hiring, ask yourself the following questions- Will It be able to control what time a person can enter and exit (hours and vacation time)? Would you have a final say in what the workers are doing? Will the person be hired for a non-specified time? Will you provide them the supplies that are needed to do their job?

If your answer is yes to all of the questions, it is obvious that you are talking about an employee. Employees are generally given less independence than contractors. This is because employees usually work at the employer’s workplace and on the time suggested by the employer. But an independent contractor provides services to more than one company and sets his/her own hours of work. An independent contractor also works out of his/her own office or home.

When hiring an employee, it’s a great idea to have them sign an employee offer and agreement. While you don’t have to be deeply specific in your agreement, For instance, you don’t have to tell your new worker what color pen to use or anything,  rather you should lay out the roles and responsibilities your new employee will have, probationary period, and, of course, the offer.

Do Independent Contractors Work With Employers?

An Independent Contractor also works with an employer to do a particular piece of work, i.e. being flexible that provides benefits to both the worker and the employer. An independent contractor would also take up work from multiple clients and maximize the monetary benefits involved instead of sticking to one particular company or a client.

Note: If you are hiring an employee (not an independent contractor) use an employment agreement instead.

Difference Between An Employee And Contractor

An independent contractor is an independent business person or entity who runs his/her own business and who does work for another business. An employee is an individual who is hired by a company to perform a specific work assigned by an employer.

For example: Someone who remodels your kitchen is a contractor and someone who sells you coffee this morning is an employee. There is one thing in common when hiring a contractor or employee, i.e an employee agreement or Independent Contractor Agreement is necessary for both.  

Is An Independent Contractor Agreement Necessary?

A legally binding independent contractor agreement will avoid misunderstandings and ensure smooth flow of work. An Independent contractor agreement is necessary and comes in-handy only if:

• You have taken up an oath of completing a service for a person/ company (i.e. as an Consultant )
• You are receiving services from an independent contractor.

Independent Contractor Agreement Not For Employees

There is a big difference, both legally and logistically between a contractor and an employee. An independent contractor agreement must be used for only workers who are classified as contractors. This will ensure more autonomy for an independent contractor over how they do their work.

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