Scope of work must be clearly defined. The work that your independent contractors will perform for your business should be confined to a certain scope, in order to properly differentiate them from an employee. This provision should therefore include a description of the services and work that your independent contractors will render for you.
Be specific about payment. Payment details should be clearly stipulated in the agreement. While payment by the hour, week, or month usually indicates that a worker is an employee, payment that’s made based on a particular job, project, or that’s based on a straight commission tends to be more common when it comes to independent contractors.
Explain who’s paying for expenses. It’s important that you specify who will pay for the expenses and take care of the supplies and other necessary purchases in the course of the work performed by the independent contractor. Usually, the supplies and expenses are covered by the independent contractor himself. But it’s best to have this in writing, just in case of a dispute.
No entitlement to employee benefits. Independent contractors are not eligible for most of the benefits that employees qualify for. This includes unemployment compensation (an independent contractor is also far more free to leave whenever he or she wants to), worker’s compensation, health insurance, and disability insurance.
