Alaska Independent Contractor Agreement

An Alaska independent contractor agreement is established between a contractor and employer when the former performs a service in exchange for payment.

Below, you can find the Alaska-specific requirements and laws for hiring independent contractors.

Table of Contents

• Independent Contractor Definition
• Worker Classification Test
• Rights and Responsibilities
• Sample

Independent Contractor Definition

Under AS 23.20.230 (a)(12), workers are independent contractors only if they meet specific requirements. This includes:

1. Having an express contract to perform the services.
2. Free from direction and control, except for specifying desired results, completion schedule, work hours, and legal compliance.
3. Paying for most or all of the tools, labor, and other operational costs for performing the services.
4. Having the opportunity for profit and loss due to performing services for clients.
5. Having the ability to fire and hire employees to help perform the contracted services.
6. Possessing all necessary licenses for the services provided, as mandated by federal, state, or municipal authorities.
7. Complying with IRS regulations by obtaining an employer identification number if needed and filing business or self-employment tax returns accordingly.
8. Qualify as independent contractors if meeting at least two of the following criteria:
   (i) Responsible for satisfactory completion and subject to liability or maintain liability insurance.
   (ii) Have a separate business location or mailing address.
   (iii) Provide services to two or more customers within 12 months or actively seeks new contracts.

Worker Classification Test

Alaska observes an “ABC test” in which workers are considered employees unless:

1. The worker has been and will continue to be free from the client’s control and direction while performing the service.
2. The worker performs the service outside the client’s office(s).
3. The worker is part of an independently established occupation, trade, business, or profession of the same nature as the service they are performing.

Rights and Responsibilities

Unlike employees, independent contractors do not have any specific rights in Alaska, but they must be aware of the state taxes and if they are eligible for compensation for work injuries.

State Taxes

Alaska does not have an individual state income tax [1] .

Compensation for Work Injuries

It depends. According to § 23.30.045 and § 23.30.055, the state follows the “relative nature of the work test” to distinguish between employees and independent contractors for workers’ compensation.

This test considers the following:

1. The character of the claimant’s business or work. This relates to the degree of skill involved, whether the claimant holds themselves as a separate business to the public, and whether the claimant is responsible for the accident burden.
2. The relationship between the claimant’s business and the employer’s business. This involves the extent to which the claimant’s work is a regular part of the client or employer’s regular work, whether the claimant’s work is intermittent or continuous, and the duration of the claimant’s work.

Sample

Below, you can download an Alaska independent contractor agreement template in PDF or Word format: