A contract cannot make someone a contractor. Every test that matters looks at the facts of the working relationship, not the label on the paper. Answer the questions on the left before you rely on this document — if they say employee, no wording fixes it.

Classification read

Not assessed

Answer the questions below for a read on whether this classification holds.

The parties

Company

State

Date

Contractor

Contractor's entity

Engaging an entity rather than an individual helps prong C. It does not decide it.

Which test applies

California, Massachusetts, New Jersey, Illinois and Tennessee use versions of ABC. All three prongs must pass — failing one means employee, and the other two do not compensate.

The classification check

Is the work outside your usual course of business?ABC prong B. In an ABC state, a 'no' here is decisive on its own.

Is the worker free from your control over how the work is done?ABC prong A, and the IRS behavioural test.

Does the worker have an independently established business?ABC prong C — other clients, own marketing, own entity.

Does the worker set their own hours and schedule?IRS behavioural control.

Does the worker supply their own tools and equipment?IRS financial control.

Can the worker make a profit or a loss on the engagement?A DOL core factor under both the current and proposed rules.

Does the worker have other clients?Economic dependence — the heart of the DOL test.

Is the engagement for a defined project rather than indefinite?Permanence weighs toward employment.

Is the worker excluded from your employee benefits?Offering benefits undercuts the classification badly.

Does the worker work without supervision from your managers?Direct supervision is the clearest control evidence.

The engagement

Services

Payment basis

Fee

Term

Notice days

Intellectual property

What actually holds

Scope and deliverablesEnforceable, and the clearest evidence of a project rather than a job.

Payment termsEnforceable. Per project or per deliverable reads better than hourly.

Intellectual propertyEnforceable — and essential, because IP does NOT pass by default.

ConfidentialityEnforceable and rarely contested.

Term and terminationEnforceable, but a long open-ended term looks like employment.

Non-solicitationUsually enforceable if narrow. Varies by state.

The 'independent contractor' labelCarries almost no weight. Every test looks at facts, not the title.

Worker waiving employee statusUnenforceable. Status is not the worker's to waive.

Non-compete on a contractorRarely enforceable, and it undercuts your own classification argument.

Independent Contractor Agreement

Services agreement · Draft for review

This Agreement is made on between , a company (the “Company”), and (the “Contractor”).

1.Services

The Contractor shall provide , as more fully described in any statement of work the parties sign. The Contractor determines the manner and means by which the services are performed, and the Company is entitled to the result rather than to control of the method.

Describe a result, not a role

“Redesign the customer onboarding flow and deliver working code by 30 June” reads as a project. “Front-end development” reads as a job title, and a job title is what an auditor sees when they open this.

2.Payment

The Company shall pay per project, on invoice, within days of receipt. The Contractor is responsible for all taxes on amounts paid, including self-employment tax, and the Company shall report payments on Form 1099-NEC where required.

3.Relationship of the parties

The Contractor is an independent contractor and not an employee, partner or agent of the Company. The Contractor is not entitled to any employee benefit, and shall not be treated as an employee for any purpose. The Contractor may perform services for others, and shall not be required to work exclusively for the Company.

This clause carries almost no weight

It is worth having and it will not save a misclassification. Status is not the worker’s to waive and not the parties’ to agree, and the IRS, the DOL and every state agency will look at what actually happened rather than at this paragraph.

4.Tools, expenses and staff

The Contractor supplies their own equipment, tools and workspace, bears their own expenses unless the parties agree otherwise in writing, and may engage their own assistants at their own cost and under their own direction.

5.Intellectual property

The Contractor assigns to the Company all right, title and interest in work product created under this Agreement, and shall execute any document reasonably required to record that assignment.

Without this clause, you do not own it

Work created by an employee generally belongs to the employer. Work created by a contractor does not. Absent a written assignment, the contractor owns the copyright and you have at best an implied licence — which is the finding that stops a software or media transaction in diligence.

6.Confidentiality

The Contractor shall keep the Company’s confidential information in confidence during the engagement and after it ends, and shall return or destroy it on request.

7.Term and termination

This Agreement runs for and may be terminated by either party on days’ written notice. The Company shall pay for services properly performed to the date of termination.

An indefinite term reads as employment

Permanence weighs toward employee status under the DOL test and the IRS relationship factors. A defined end date, renewed deliberately, is far stronger than an open-ended arrangement that has simply continued for three years.

8.Indemnity and insurance

The Contractor shall maintain their own insurance appropriate to the services, and shall indemnify the Company against any claim arising from the Contractor’s own acts, omissions or tax obligations.

9.Governing law

This Agreement is governed by the laws of , and is the entire agreement between the parties on its subject matter.

For the Company · date

Contractor · date