Independent Contractor Agreement
The difference between an employee and an independent contractor is often subtle, which leaves many questions unanswered as to liability, responsibilities, compensation, etc. As such, it is first important to distinguish one from the other. An employee is one who performs services for you if you can control what is done and how it is done; this is true even if you give your employee freedom of action. You must generally withhold taxes and pay benefits to an employee. An independent contractor, on the other hand, is one who follows an independent trade, business or profession, in which he offers services to the public (i.e. lawyer, strategy/ marketing consultant, contractor/ subcontractor, etc.), and for whom you generally need not withhold or pay taxes or benefits. An independent contractor will operate free from your control and is likely accountable to you only to the extent that they must complete the job for which they were hired.
You may be tempted to engage an independent contractor in an oral agreement, especially if his responsibilities are few or for a short period, so as to save the time, money and energy required to develop a separate independent contractor agreement. But executing a written agreement and clarifying the independent contractor status of your hiree will ensure that you avoid the ire of the Internal Revenue Service (IRS) and protect yourself, your business and intellectual property. At the very least, you should negotiate with the hiree a written independent contractor agreement that is like your employment agreement but also speaks to the following:
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