One of the most frequent type of contracts my clients request is a contract to use for new hires. As a creative entrepreneur, it’s important to have a contract on hand to use when hiring. Most of my clients are bringing on independent contractors (as opposed to full-time employees) so that’s what we’re going to discuss today.
Today I’m sharing a few items that are essential to include in your new hire contract. Although the contract itself should be more robust and include additional aspects outside of the essentials listed below, these seven items should give you a good basis for what you’ll need to include in your independent contractor agreement.
7 Basics to Hire People
What to Include in Your Independent Contractor Agreement
Define the Relationship //
When hiring an independent contractor or freelancer, you should always define the relationship in the contract. What do I mean by that? You need to make sure it is clear that you are hiring him/her as a contractor and NOT an employee. The language in your contract should be straight forward and state that there is no employer-employee relationship and that the contractor is responsible for paying his/her own taxes, withholdings, insurance and any other benefits that may normally be afforded to traditional employees.
Scope of Work //
The scope of work should be defined in the independent contractor agreement. You should outline the contractor’s job responsibilities in this section. Also include language addressing how work will be assigned to the new hire.
When hiring a freelancer or contractor, it’s important to be clear on how you will compensate him/her, the pay rate, and when you will make payments.
You should include your payment method – will you be providing payment via PayPal, check, direct deposit etc.? Will you make payments on a schedule or is the contractor responsible for submitting weekly time sheets/invoices to you?
You should also include the pay rate. Are you paying the contractor per project or per hour?
Work Product //
The last thing you want when bringing new members onto your team is for your new contractors to produce work for you and your business and then sell and/or claim it as their own. It’s important to include language in your independent contractor agreement stating that all work created by the contractor or used by the contractor in relation to the job that he/she is hired for is the exclusive property of your business.
You should also emphasize that the contractor does not have any rights to things like articles, practices, designs, techniques learned, client lists, reader lists, subscription lists, price lists or any other work produced and learned in relation to your business and the job he/she was hired to do.
On a similar note, it’s important to let a new hire know that he/she may be privy to confidential information on the job. You should include language in your agreement that states all confidential information and proprietary property shall reman confidential and the exclusive property of your business.
Most independent contractor agreements do not include an exclusivity clause. However, I like to include a clause in my contractor agreements stating that while you are not requiring the contractor exclusively work for you and your business, the contractor understands that when he/she is performing work for you and your business, he/she represents your company and should not promote any other company, including his/her own business.
Lastly, when hiring a contractor, depending on the task you’re hiring for, you may want to set an end date for the relationship. If you’d prefer to keep the contractor on indefinitely, you should include language stating different instances in which both you as the business owner and the new hire may terminate the agreement.
I hope this post shed some light on essential items to keep in mind when hiring. If you have any questions, please email me at firstname.lastname@example.org.
Are you a creative entrepreneur in need of help drafting a contract for a new hire? Check out my independent contractor agreement template! It’s available for immediate download here! If you’re looking for more of a custom contract, shoot me an email at email@example.com or complete my contact form!