Independent Contractors - "Put It in Writing"
Many professionals who have been laid off in recent years have turned valuable skills honed by years inside a corporation into money-making opportunities for themselves by becoming independent contractors. Unfortunately, while many independent contractors rely on verbal agreements, often this leads to lost business and lost revenue. The bottom line - there should always be a written agreement as to the work and the pay.
Items that should be covered in any basic Independent Contractor agreement include:
- The services to be performed (clearly defined)
- Payment for those services and payment terms (fee or hourly rate and any penalties for late payment)
- Reimbursement for expenses (describe the reimbursable expenses, the rate of reimbursal and any necessary approvals)
- Length (or term) of agreement
- Agreement termination rights
- Resolution of disputes and conflicts (including attorney fees and costs, and the state's law you agree to operate under)
- Waivers of liability
- Treatment of confidential information and client lists
- Hold harmless clause
- Execution by all parties
Having a written agreement protects independent contractors in the event of nonpayment, a change in work requirements or a violation of the agreement in any other way. Written agreements also help to establish a person's independent contractor status with the IRS or other government entities, providing Department of Labor protection for both the business owner and the independent contractor.
Independent contractor agreements also offer broad legal protection for both the independent contractor and their client, and help each manage expectations.
If you are an independent contractor – or a business that hires independent contractors on a regular basis – and need assistance with crafting Independent Contract Agreements, contact Wood, Atter & Wolf, P.A., a Jacksonville, Florida business and tax law firm.
