You may not believe that independent contractor agreements are necessary. After all, for most businesses, the relationship between the company and the contractor is brief. That’s one of the benefits of hiring independent contractors in the first place.
However, many Connecticut companies get in trouble for misclassifying employees as independent contractors. It’s an easy mistake to make, one that can potentially be remedied by using independent contractor agreements.
Our Connecticut business attorneys can help you draft and implement these contracts today.
How Companies Get in Trouble With Independent Contractors
Contractors provide a number of beneficial services to companies, usually on a short-term basis. A company may need a one-time, specific service that employees don’t perform. So they bring in an independent contractor to get the job done. After the work is done, the parties – business and contractor – go their separate ways. The relationship ends.
For that reason, companies often don’t think they need independent contractor agreements. However, it’s easy to misclassify an employee as a contractor. Some companies do this on purpose to avoid paying benefits and taxes. Others do so unintentionally.
Regardless, crossing the line from contractor to employee can cost your company severely. Legal damages and court costs can be prohibitively expensive.
What Is an Independent Contractor in Connecticut?
Of course, this raises the question: what is an independent contractor in the first place? In general, the level of control that a company exercises over a worker will determine the relationship. The more control, the more likely it is that the worker is an employee.
Connecticut uses three specific factors to determine whether someone is an independent contractor or an employee.
To be a contractor:
- The individual must be free from direction and control in the performance of work duties.
- The work must be outside the company’s usual course of business, or places of business.
- The individual must be engaged in an independent trade of the same nature of work performed.
Why Do I Need an Independent Contractor Agreement?
Contracts alone do not answer the question of whether a worker is an employee or a contractor. After all, it would be too easy for an employer to call every worker a “contractor.” Nonetheless, contracts can inform a court as to the work relationship. A court will consider an independent contractor agreement along with other evidence in deciding whether an employment relationship exists.
Some of the advantages of creating contracts for your contractors include:
- It explains the rights, roles, and responsibilities of both the company and the contractor.
- It limits both parties’ expectations regarding the work to be performed.
- It evidences the intent of the company to create an independent contractor relationship.
A contract can also prevent a contractor relationship from becoming an employment relationship. For instance, a contract can specify when the independent contractor relationship ends. This may be used to show that any work performed beyond that relationship was not permitted. Having this sort of evidence may help absolve a company of wrongdoing.
Our Firm Can Help With Independent Contractor Agreements
Aeton Law Partners works with companies to draft all types of contracts, including independent contractor agreements. We understand state law and we know how important your business is to you. Let us get started working with your organization today. Give us a call.