An independent contractor is someone who often controls his or her work environment. He or she usually uses their own tools and equipment to accomplish a specific job. They are also more likely to decide how to accomplish the job themselves instead of being instructed by someone else. They also usually set their own working hours, but not always. Independent contractors are often paid by the job, and the working relationship is generally complete with the job is finished.
In California, independent contractors do not have some of the same benefits that employees receive, including workers’ compensation benefits and unemployment. As a result, it is important to know who is an employee and who is an independent contractor. Nonetheless, this can be a tricky process.
Why Do You Need an Independent Contractor Agreement?
In California, workers are presumed to be employees unless the employer can prove that the worker is an independent contractor. Having an independent contractor agreement can help an employer or worker show their status under the law. Not every independent contractor will have this type of contract, but it is a good idea to develop it nonetheless.
This agreement will set out the expectations between the parties. An independent contractor agreement essentially governs the entire relationship between the client and the independent contractor.
Information to Include in an Independent Contractor Agreement
Because of the obvious importance of the independent contractor agreement, you should be sure to include certain information like:
- A comprehensive description of the project (or a reference to another document that provides the description)
- The timeline for the project, including any smaller due dates that build to the completion date
- The payment amounts and timeline for the project (i.e., payment at milestones, payment at project completion, or periodic payments)
- How disputes will be resolved
- A specific provision that taxes or other required payments will not be withheld from wages
- A note that the worker will not qualify for certain benefits, such as health insurance, sick pay, etc.
- How the client will be invoiced for services (if at all)
- That the independent contractor is permitted to continue working for other clients
- How equipment and supplies will be provided, if at all
- Whether the worker can use assists or submit work to others in his or her stead
- A specific provision that explains the worker’s status as an independent contractor (and that he or she knows and understands what this status means)
- How expenses will be handled
- Whether specific insurance coverage will be required (this provision is especially useful for construction-related workers)
- How the agreement may be terminated
- Who will own any intellectual property that arises from the relationship
- Any restrictions on confidentiality
The above list is by no means an exhaustive list. Other provisions may also be necessary, depending on the type of work you are doing and the nature of the relationship.
Integrated General Counsel, P.C. can help you develop an independent contractor agreement that addresses your needs and protects you from issues that you may not even be aware existed. Contact us for more information.
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