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Sample Independent Contractor Agreement Berkeley Law

Recruiting independent contractors can be a very effective way to achieve what you need to do. You will have a service for yourself and you will not have to pay them a minimum wage/overtime, to grant them benefits or to withhold part of their salary for Social Security/Medicare contributions. But you have to make sure that you actually treat them as independent contractors – otherwise the government will classify them as employees, and you may owe a considerable amount of additional fees and penalties. In general, the government considers an independent contractor to be an expert recruited for clearly defined short-term projects who works in his own independent company. The more the relationship in which the worker has a specific skill group and the employer has no control over how the work is done, the more likely it is that a court will decide that the worker is in fact an independent contractor. Hiring an independent contractor to work for you seems easy. There are no complex papers like what you need to hire an employee — you just shake hands and go, right? Finally, it requires that the worker himself choose to enter the business himself. Factors that would weigh in favour of an entrepreneurial relationship include: spend more energy to grow your business by hiring an independent contractor. The difference between contractors and employees may be blurred. That`s why one of the most important pieces of legislation is to understand how you classify your staff.

Use this article to speed up every step of the contractor`s recruitment process so you can quickly help with their operation. Of course, there are exceptions to any rule. For example, California recently passed Proposition 22, which excludes carriers based on apps like Lyft and Uber from classifying drivers as employees. Although some drivers may meet the criteria for employee status, the law allows them to be classified as independent contractors. Before hiring an independent contractor, make sure that the person you want to do business with is really an independent contractor. This means that this person is free to determine how the work should be performed, when it should be performed and, in some cases, where it should be performed. If you assign hours, if that person has to work, and if you have final control over when and how the work should be done, the person is most likely an employee. This section generally states that payments to the independent contractor do not include withholding income tax or payroll tax (including FICA Social Security and Medicare taxes). No federal or national income tax is withheld for payments made to the contractor, unless required by warranty retention requirements. No FICA tax will be withheld from the contractor`s compensation and will not be set aside by the company on behalf of the contractor.

Did you know that if you hire independent contractors, you will probably become more sublime? That`s why it`s important to keep records carefully. Keep every document that relates to your freelancer (and make sure they are properly classified).

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