Independent Contractor Agreement

1. What are independent contractors?

Independent contractors are workers hired by a company to provide limited services outside of the scope of their employee’s regular duties. They aren’t bound to any one employer, are only engaged for as long as is needed to finish the specified job, and are treated differently from employees, too. Businesses that engage with independent contractors can’t oversee the work itself — they only have final say over the end result. Independent contractors enjoy more control over their work; for example, they maintain economic independence from their employers and are in charge of how they get the work done. However, as a part of the trade-off, they lack the protections enjoyed by most employees and are also responsible for paying their own income, Social Security, and Medicare taxes. 

2. What is the legal definition of an independent contractor under Florida law? 

• Workers’ or unemployment compensation
• Whistle-blowing
• Wage and hour laws
• Employer liability

3. How can a business know if an individual is an employee or an independent contractor? 

Because of the multiple factors, jurisdictions, and oversight agencies involved in determining worker classification, the method for determining whether a worker is an employee or an independent contractor needs to be decided on a case-by-case basis. Florida courts apply what is known as an “economic realities test,” which measures whether an individual is dependent upon someone else’s business for the opportunity to work, or if they are in business for themselves. When working with independent contractors, it’s important for companies to verify that the individuals are capable of satisfying certain factors to help reinforce their independent contractor status. An independent contractor agreement can help back-up a worker’s status as a contractor.

4. What characteristics separate an independent contractor from an employee? 

Independent contractors are distinguished from employees based on six main criteria. Each point carries equal weight. Ultimately, the determination comes down to whether the individual is in business for themselves. The factors for reaching this decision are as follows: 

• How much control the employer has over the individual’s work
• Whether the individual has the chance to make more money by hiring their own workers
• Whether the individual furnishes their own tools or equipment 
• How specific of a skill the job requires
  
• The duration and permanency of the job
• Whether the work is an essential part of the employer’s business

5. What are the benefits of hiring an independent contractor? 

• Fair Labor Standards Act rules covering minimum wage and overtime compensation 
• Providing employee benefits, such as health insurance and retirement planning
• Tax obligations if the contractor files a Form 1099-MISC instead of a W-2
• Insurance obligations, such as unemployment or workers’ compensation 
• Other obligations under local, state, and federal law, including health and safety, wage and hour, and equal employment standards

6. Are you a law firm?

7. Will I work with an attorney?

8. Can I download a form online?

9. Do you sell forms?

10. How do I know what contract is best for my business?