What Is an Independent Contractor Agreement?

Signing an independent contractor agreement benefits the employer and contractor.

An independent contractor is someone hired to work for a company, but really isn't an employee. An independent contractor includes drivers, writers, consultants, contractors and others. These individuals usually work for short time doing a particular task that is made legal with an IRS-regulated independent contractor agreement.

Employer Creation

The employer provides the project and the contractor does the job according to his skills; this is considered work for hire. An independent contractor will own his work unless otherwise indicated. That is one reason the employer provides an independent contractor agreement to be signed. Both parties often have the agreement reviewed by an attorney before signing.

Items in the Agreement

This agreement includes the names of both parties and other identifying information, such as a business license number. The parties agree to various items, including pay rate and terms of the position. Often it is explained that there are no benefits available for an independent contractor. Usually the worker will use her own equipment, but this agreement indicates that any company materials used be returned once the project ends.

Tax and Legal Issues

Often independent contractors do not have taxes taken out of their pay. If this is the case it is mentioned that the contractor must file an IRS 1099 form. Another legal issue includes a non-disclosure agreement. This helps ensure that trade secrets will not be discussed by the independent contractor.

References

• Inc.: Independent Contractor Agreement
• Find Law: Sample Independent Contractor / Consultant Agreement