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Difference Between Independent Contractors and Employees Independent contractors have more control over their work than employees, who are generally subject to the control of the companies for which they render services. The distinction is important.
Workers who perform most of their work using company-provided equipment, tools, and materials are more likely to be considered employees. Work largely done using independently obtained supplies or tools supports an independent contractor finding.
How to Write a Contractor Agreement Outline Services Provided. The contractor agreement should list all services the contractor will provide. ... Document Duration of the Work. Specify the duration of the working relationship. ... Outline Payment Terms. ... Outline Confidentiality Agreement. ... Consult with a Lawyer.
The law further states that independent contractor status is evidenced if the worker: (1) has a substantial investment in the business other than personal services, (2) purports to be in business for himself or herself, (3) receives compensation by project rather than by time, (4) has control over the time and place ...
The general rule is that an individual is an independent contractor if the payer has the right to control or direct only the result of the work and not what will be done and how it will be done. If you are an independent contractor, then you are self-employed.
By contrast, an independent contractor performs services required by an employer but is not subject to the employer's control about how the services are performed.