How to Create an Independent Contractor Agreement
Describe the contractor's relationship with your company., Describe the project's scope of work., Clarify the amount you will pay the independent contractor., Document the project time frame., Include a paragraph about negotiating disputes., Remind...
Step-by-Step Guide
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Step 1: Describe the contractor's relationship with your company.
Specifically stating your intentions when hiring a freelancer is one of the first steps to create an independent contractor agreement.
Articulate how your contractor will work with your company on a project.
Reiterate that the contractor will provide deliverables completely independently of direct supervision.
A true independent contractor controls when and how project deliverables arrive at the client's office.
Remind the contractor in writing that he is not a paid employee nor is he entitled to benefits given to employees. -
Step 2: Describe the project's scope of work.
This helps clarify any potential misunderstandings about what is expected from the independent contractor.
State who will pay for what supplies.
Independent contractors always provide office supplies and equipment necessary to implement paid duties. , Describe the total pay for the job and when you will pay for the work.
Include a clause about project costs.
State that the contractor will not earn more than the fee approved for your specific project.
Remind the contractor that any amounts in excess of this fee must receive management approval before work begins.
Set up payment terms.
Tell the contractor when and how much you will pay for completed work.
For example, some companies will pay 50 percent down before the project begins, then pay the balance due after management approval when the project is over. , Indicate when the work begins and when you expect it to end. , Outline how project disputes between the independent contractor and the company will be resolved.
For example, will you use mediators to resolve conflicts or lawyers? Tell who will pay for legal expenses incurred from disputes. , Independent contractors always pay their own income and employment taxes directly to the government. -
Step 3: Clarify the amount you will pay the independent contractor.
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Step 4: Document the project time frame.
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Step 5: Include a paragraph about negotiating disputes.
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Step 6: Remind the independent contractor that tax payments are not your responsibility.
Detailed Guide
Specifically stating your intentions when hiring a freelancer is one of the first steps to create an independent contractor agreement.
Articulate how your contractor will work with your company on a project.
Reiterate that the contractor will provide deliverables completely independently of direct supervision.
A true independent contractor controls when and how project deliverables arrive at the client's office.
Remind the contractor in writing that he is not a paid employee nor is he entitled to benefits given to employees.
This helps clarify any potential misunderstandings about what is expected from the independent contractor.
State who will pay for what supplies.
Independent contractors always provide office supplies and equipment necessary to implement paid duties. , Describe the total pay for the job and when you will pay for the work.
Include a clause about project costs.
State that the contractor will not earn more than the fee approved for your specific project.
Remind the contractor that any amounts in excess of this fee must receive management approval before work begins.
Set up payment terms.
Tell the contractor when and how much you will pay for completed work.
For example, some companies will pay 50 percent down before the project begins, then pay the balance due after management approval when the project is over. , Indicate when the work begins and when you expect it to end. , Outline how project disputes between the independent contractor and the company will be resolved.
For example, will you use mediators to resolve conflicts or lawyers? Tell who will pay for legal expenses incurred from disputes. , Independent contractors always pay their own income and employment taxes directly to the government.
About the Author
Sandra Baker
Specializes in breaking down complex lifestyle topics into simple steps.
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