Let’s make one thing clear…
Never Use Independent Contractor Agreements to Hide Employees
Independent contractor agreements should not be used in your Internet business to disguise an employer-employee relationship.
If you get caught doing this with an employee, you could be held liable for payroll taxes and some nasty penalties. There’s also the potential to deal with unemployment and worker’s compensation claims with an unhappy state government involved because you haven’t been paying the related employer contributions to those systems.
In other words, it’s simply not worth the risk.
When to Use Independent Contractor Agreements
If there truly is an independent contractor relationship, such as a work-for-hire web design gig for a single site, you’ll want a signed written independent contractor agreement in place to protect your legal rights.
Although the terms of the contract will vary depending upon the type of work to be performed and the unique circumstances surrounding the relationship, there are some general provisions that most of these types of agreements have in them in order to be binding (legally enforceable) in a way that offers you protection. These terms include:
- Scope of work
- Price (amount and time(s) of payment)
- Expense allocation (including any reimbursements)
- Deadline for completion
- Milestones (often tied to payment)
- Existence of an independent contractor relationship rather than employment
- Ownership of intellectual property rights for work created and protection of trade secrets
- Governing law and jurisdiction
- Alternative dispute resolution provisions
How to Get Independent Contractor Agreements
Of course, an experienced Internet lawyer can draft customized independent contractor provisions that are designed to protect your interests while keeping you out of court in case of a dispute. If you’d like to talk with Web Lawyer Mike Young about getting an independent contractor agreement, be sure to set up a telephone consultation.