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Independent Contractor Agreements

Posted by attorney Gregory Glaser

Employees are entitled to benefits by statute, but independent contractors are not. An independent contractor relationship can be established by contract, as for example with a consultant, mechanic, serviceman, professional, etc. See Avvo's consulting agreement template to get a sense of what you'll need to include.

Keep in mind though, it takes more than just a well-written agreement for a court to define a person as an independent contractor. According to the modern legal test, the worker must actually be treated like an independent contractor rather than an employee. The key is independence. The more independence given to the worker, the more likely a court will deem that person an independent contractor.

Each of the following factors are used by courts to test whether a person is truly an independent contractor, but no single factor by itself can decide the issue:

  1. Whether the business controls the worker in the manner and means by which the work is performed;
  2. Whether the worker is engaged in an occupation that is different from that of the business;
  3. Whether or not the work is a part of the day-to-day activities of the business;
  4. Whether the worker supplies his own tools, materials, and workplace for the work;
  5. Whether the service rendered requires a special skill;
  6. Whether this kind of work is typically handled by independent contractors;
  7. Whether the worker will enjoy profit or incur loss depending on his managerial skill;
  8. The length of time for which the services are to be performed;
  9. The method of payment, whether by time or by the job; and
  10. Whether or not the parties believe they are creating an employer-employee relationship.

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