An independent contractor is a person or business who performs services for another person under an agreement and who is not subject to the other's control, or right to control, the manner and means of performing the services. The exact nature of the independent contractor's relationship with the hiring party is important since an independent contractor pays their own Social Security, income taxes without payroll deduction, has no retirement or health plan rights, and often is not entitled to worker's compensation coverage. There are a number of factors which to consider in making the decision whether people are employees or independent contractors.
One of the most important considerations is the degree of control exercised by the company over the work of the workers. If the company had the right to supervise and control such details of the work performed, and the manner and means by which the results were to be accomplished, an employer-employee relationship would be indicated. On the other hand, the absence of supervision and control by the company would support a finding that the workers were independent contractors and not employees.
Liquidated damages (paragraph 8 of the form) may be incorporated as a clause in a contract when the parties to a contract agree to the payment of a certain sum as a fixed and agreed upon payment for not doing certain things particularly mentioned in the agreement. It is the amount of money specified in a contract to be awarded in the event that the agreement is violated, often when the actual damages are difficult to determine with specificity.
