A Georgia independent contractor agreement is a legally binding document between a contractor and employer, with the former delivering a service in exchange for payment.
Employers who fail to consider independent contractor laws can face a number of potential consequences at both the state and federal levels. As a result, employers entering into any type of employment agreement, as well as workers in Georgia, need to understand independent contractor state law and how it has the potential to impact them.
- Worker Classification: ABC Test
- Tax Structure: Graduated-Rate Income Tax
- Definition: § 34-8-35
- At-Will Employment: Yes
Independent Contractor Definition
Georgia carefully lays out several key elements that define an independent contractor. In Georgia, an independent contractor must meet these requirements based on changes made in July 2022 [1] :
- The contractor can be employed by more than one company at the same time.
- The contractor can determine whether to accept or reject work assignments and will not face penalties (like being fired or a personal improvement plan) for those decisions.
- The contractor does not have to meet criteria like minimum hours worked and can choose a work schedule.
- The contractor does not receive direct oversight regarding where services are performed or how the work is completed.
- The contractor does not have to behave in a specific way to receive wages.
An employee, on the other hand, operates under more direct control from the employer. The employer can determine how the employee behaves, dresses, and performs basic work tasks as well as where that work is performed (i.e., in person or remotely).
Worker Classification Test
Working as an independent contractor in Georgia brings many freedoms for the worker and may reduce some responsibilities for the employer. Properly classifying workers is essential to entering into a reasonable working relationship.
Georgia uses an ABC worker classification test to determine whether workers are independent contractors or employees [2] . It includes seven factors that may influence whether a worker is considered an employee or a contractor.
Rights and Responsibilities
Independent contractors in Georgia have the right to make daily decisions about their work, including where it is completed and how they may want to take care of those work tasks.
They also have the right to determine what hours they work and whether to accept or reject specific tasks and will not face employment penalties because of those decisions.
State Taxes
Employees in Georgia will have taxes withheld directly by the employer. Independent contractors, however, will need to take care of withholding and paying their own taxes.
Georgia independent contractors must pay a self-employment tax that includes Medicare and Social Security. They will also need to consider Georgia’s graduated individual income tax, which can range between 1% and 5.75% of the individual’s income, depending on that income range.
Filing for Unemployment
In Georgia, only employees can seek unemployment benefits. Independent contractors cannot claim unemployment benefits. While these benefits were available to independent contractors under the Pandemic Unemployment Assistance program [3] , that program has since ended.
Sample
Below, you can download a Georgia independent contractor agreement template in PDF or Word format:
