An Idaho independent contractor agreement outlines a few key details, including how the contractor will be paid and the service provided, which ensures safety for the contractor and the client. Therefore, the document protects the rights of both parties and establishes clear expectations, as the agreement is legally binding once signed.
- Worker Classification: ABC Test
- Tax Structure: Flat Income Tax
- Definition: § 72-1316(4)
- At-Will Employment: Yes
Independent Contractor Definition
In Idaho state, an independent contractor is an individual who provides goods or services for another person or entity under the terms outlined in a contract [1] .
Conversely, an employee in Idaho is any individual who enters into employment or works under a contract of service or apprenticeship with an employer [2] .
Worker Classification Test
Idaho state law classifies workers using the Right to Control test. The following four criteria are used to determine whether an individual is an independent contractor or employee:
- Direct evidence of the right to control, including compliance with instructions, services rendered personally, and training.
- Method of payment, including the realization of profit or loss and payment basis.
- Furnishing of major items of equipment, including significant investment, doing work on the employer’s premises, and furnishing tools and equipment.
- Right to terminate the relationship without liability, including continuing relationship, right of the employer to discharge, and the employee’s right to terminate.
If an individual meets the criteria outlined in the Right to Control test, they are considered independent contractors by the state of Idaho.
Rights and Responsibilities
Although many states have specific rights covering contractors, Idaho doesn’t outline particular rights surrounding independent contractors working within state lines. However, there are general rights independent contractors receive, including the right to contract, market service, and engage other contractors.
State Taxes
Independent contractors in Idaho must follow specific tax rules as discussed in IRS Revenue Ruling 87-41, as the state applies the IRS 20-factor test, which determines whether an employer-employee relationship exists [3] . This test outlines twenty factors, including instructions, training, and services rendered personally.
Filing for Unemployment
According to the Idaho Department of Labor, individuals must have worked for an employer covered by the Employment Security Act to be eligible for unemployment benefits [4] . This excludes independent contractors and self-employed workers.
Sample
You can download an Idaho independent contractor agreement template below in PDF or Word format:
