When you set up a business as an independent contractor, you become your own boss. Or do you? In many ways this is true, but you’re still working with other people, even if technically you’re on your own. Because you could still be vulnerable, there are independent contractor legal rights in place to protect you, and your employees, on the job. The key is to understand what they are, so you can be sure you’re properly covered.
Laws Protecting Independent Contractors
Independent contractor laws are a formal recognition of some of the challenges that may arise for the self-employed. While the law can (and will) protect you in many cases, it’s extremely important that you have a lawyer write-up a strong contract, detailing every part of your work schedule, delivery expectations, and payment policy. Then, in order to ensure that the contract is binding, make sure to have both you and your client sign it, before you begin any project.
Six Essential Independent Contractor Legal Rights
Although you aim to please in your work, you don’t have to do everything you’re asked. But it can be tricky differentiating between what you want, and what actual independent contractor labor laws say.
1. Right to control your work
One of the reasons you likely chose to setup your own business is so you can control your workflow. But when push comes to shove on a work site, who’s in charge? Unlike employees, independent contractors are not obliged to follow their customer’s requests or advice, unless the contract states differently. Put even more simply, employers control how you work, while customers don’t have that right; if a customer gets over-involved, they may risk being classified as your employer, with all the obligations that come with that. You may even want to look into and understand the differences between being a contractor and an employee.
2. Multiple work projects
As an independent contractor, you are entitled to have more than one customer at a time. More than that, while you’re working for one customer, you are free to continue marketing your services to others. No customer should demand that you work only for them.
When you take a contracting job, you likely settle on either an hourly or flat fee for getting the job done. Hopefully if you use a flat fee, you’ll accurately take into account how many hours the project will take, leaving yourself a decent hourly wage – because the law doesn’t protect you on that one.
That being said, contract employees’ rights will require that you pay a minimum wage to your workers. So be doubly careful when negotiating. If you can’t really guesstimate how many hours will be required, you may want to have two parts to your contract if possible, one for the project itself, plus hourly wages for your workers.
Independent contractor legal rights do not cover hours worked, again, unless spelled out in your contract. Bottom line, you may need to put in extra time to deliver results on schedule. Basically, it’s up to you to finish your job on-time. If you have employees, however, you’ll have to consult with your local laws, as they will be eligible for overtime.
5. Independent contractor payment rights
You certainly have the right and expectation to be paid in full in a timely matter. However, you will need to have the details specified in writing, in a signed contract.
It’s also important to note note that as a freelancer, your customer will not need to pay you vacation days, sick days, social security, or any type of contractor insurance. Similarly, your customer is not responsible for your freelancer taxes. You will need to take care of all these things yourself, or with the help of an accountant. The one exception is 1099 contractor rights. That is, your client is required by the IRS to fill out a 1099 form for you, and any other person they paid during the year (outside of employees).
On the plus side, in addition to your pre-agreed payment, you have a right to certain tax deductions, including materials used onsite.
6. Termination of services
Independent contractor termination rights are largely what you’ve determined in your contract. Remember, if you don’t have this detailed in your contract, your customer can fire you at any time, without notice. As such, make sure to include a clause in your agreement specifying reasons for termination, notification period required (i.e. the amount of advance warning required), and compensation for early termination.
Summary of Independent Contractor Rights
While most labor laws govern employee-employer relationships, as a self-employed contractor, you do have certain independent contractor rights. The most important one is the most basic: a signed contract. This contract first and foremost sets expectations. But more than that, it protects your interests in the long-run, making your agreement enforceable by law. Don’t start any job without one, and you’ll be on your way to protecting your critical independent contractor legal rights.