Accomplished Independent Contractor Agreement Attorney Assisting Clients Across the Nation
Sometimes a business needs help with a specific, limited-time project or doesn’t have the capital to bring on an employee and pay benefits. It’s also possible that you have work that needs to be done that requires specific expertise that you or your current employees don’t have. In these situations hiring an independent contractor can make sense. The key to successfully using independent contractors to help in your business is to make sure that all the terms and conditions of the work to be done are carefully spelled out and that both the business and the independent contractor are in agreement on those terms.
The best way to accomplish this is to have an experienced Independent contractor agreements attorney help you draft a solid contract that will get everyone on the same page, and that will hold up in court should the terms be violated. An independent contractor agreement lawyer from Thompson Patent Law will bring 20-plus years of experience to the drafting of your independent contractor agreements. Call our office today at (512) 649-1046.
What is the Difference Between an Employee and an Independent Contractor?
The main difference between an employee and an independent contractor is the level of supervision and control the employer has with regard to the work they do. An independent contractor is typically completing work out of sight of the employer, using their own materials and workspace. The independent contractor works independently, has other clients, bills via invoice, and may incur profit and loss from their business. There is no ongoing relationship beyond the end of the contract in question unless another contract is entered into.
An employee, on the other hand, works when and where the employer determines using company equipment and probably a company workspace, is paid wages from which required withholdings are processed such as Social Security and income tax and may receive benefits beyond salary or hourly wage, typically including such things as paid time off, health insurance, and retirement savings plans. The employee is employed continuously until the employment is terminated, regardless of what projects are completed. An independent contractor usually does not have anything withheld from pay and is responsible for paying Social Security and income taxes themselves. An employee is issued a W-2 form at the end of the year as a record of annual earnings to use in filing income taxes, while an independent contractor is sent a 1099 form either at the end of the limited-term contract or at the end of the calendar year showing earnings for tax purposes.
What Should an Independent Contractor Agreement Include?
It is important that any independent contractor agreements that you enter into are clear, concise, and complete. Elements that should always be included are the specific duties to be performed; a timeline both for deadlines within the project and the duration of the business relationship as a whole; the compensation details including amounts, the timing of payments, required deposits if any, and how billing will occur; and any additional protections for you such as non-competition, non-disclosure, and dispute resolution clauses.
Having a complete and detailed independent contractor agreement can head off problems in the future, as it ensures that all parties understand the terms and are in agreement. Well-crafted independent contractor agreements protect both the employer and the contractor, and are enforceable in court if violations should occur.
Why is it Important to Classify Workers Properly?
In order to be in compliance with employment law, an employer must be very clear about whether a worker is an employee or an independent contractor. Some employers want to classify a worker as an independent contractor in order to avoid providing benefits and having to withhold payroll taxes, but still control when and where the employee works.
This is not legal and can get a business into trouble with the Internal Revenue Service and the U.S. Department of Labor. Misclassifying workers can result in hefty fines and penalties, which are multiplied if the IRS finds the misclassification to be intentional. Stay on the right side of the IRS with the clear, professional legal counsel of an experienced independent contractor agreement lawyer. Call Thompson Patent Law today at (512) 649-1046.
Who Owns Work Created by an Independent Contractor?
Without a properly drafted work for hire agreement, all inventions and copyrights belong to the creator of the work. This is true even if someone else paid them to do the work. With a properly drafted work for hire agreement, you can safely employ both independent contractors and employees and your company will own all of the intellectual property that you paid to develop, If you need help with a work for hire agreement, contact Thompson Patent Law at (512) 649-1046 to get started.