If your company is looking to hire remote contractors and freelancers, it’s important that you use an Independent Contractor Agreement to define the terms of this agreement, the scope of work that’s expected, the deadline by which the work is due, and the payment amount that has been agreed between the contractor and the hiring organization.
In this article, we’re looking at what you need to include in your Independent Contractor Agreement, and why – together with a simple independent contractor agreement that you can cut and paste for your own use.
What is an independent contractor?
An independent contractor is defined as anybody that’s a self-employed worker. While variations differ from country to country, this classification of worker typically covers all contractors, freelancers, and sole business owners.
When you hire an independent contractor, they will be performing the services and completing the assignments that help your organization thrive. In addition, they have flexibility to work for many different clients or organizations at once – not just your business. So they fall outside the scope of a typical employee.
With the rise of remote work, many organizations are hiring skilled professionals such as designers, photographers, writers, and consultants from around the globe to assist their internal teams and avoid the overheads and costs of full-time or part-time employees.
Unlike employees, independent contractors are flexible with their hours and workload. You don’t need to factor in expenses like sick pay, social security, workers compensation insurance, or vacations – and you don’t need to deal with tax payments. Independent contractors are responsible for calculating and paying their own taxes.
What Is An Independent Contractor Agreement?
An Independent Contractor Agreement is a contract between a company and an independent contractor to hire the contractor without them becoming an employee. In this agreement, the contractor or freelancer agrees to work for the hiring organization for a specified period of time, on a specific assignment or project.
Why Do You Need An Independent Contractor Agreement?
Independent freelancers are usually skilled professionals or subject matter experts who set their own rates and may propose a scope of work and a timeframe that will help the hiring organization best reach its goals.
Having a written agreement signed by the parties involved ensures there is no scope creep in terms of timeframes, amount of deliverables, or the type of work that the contractor has been hired to do.
The terms and conditions of the contract can be negotiated between the contractor and the hiring company to ensure both parties are in agreement before signing.
In the event there are any delays, disputes, or problems between the start and end of a freelance project, the company or the contractor can refer to this legally binding contract to settle matters.
Let’s take a look at a simple Independent Contractor Agreement that you can use as the basis for creating your own contract.
Simple Local or International Independent Contractor Agreement
A proper contract should be prepared for any new project or assignment that is being undertaken between a hiring company and an independent freelancer.
What you need to include:
- The names of both parties – contractor and hiring company
- Project scope – establish the exact services that will be performed by the contractor
- Changes, additions, and extra expenses incurred – set out how any changes to the original contract will be dealt with
- Timeframe – set out the start date, any milestones, and the deadline for completion
- Payment terms – set out the payment amount and payment terms
- General terms and conditions
- Contract termination – this protects both the contractor and hiring company if the agreement needs to be terminated for any reason
- Signature of both parties – this makes the agreement legally binding between both parties
In Summary
If you’re a freelancer or an organization that’s looking to hire freelancers for projects or to bridge skill set gaps in your internal team – it’s essential that you have a signed Independent Contractor Agreement.
This agreement protects both parties when it comes to the provision of this agreement, scope of work, deadlines, payments, confidentiality, business interests, and liabilities during the course of a project with an independent contractor.
While independent contractor agreements aren’t required by law, they ensure that project assignments run smoothly for everyone involved.
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