A New Hampshire independent contractor agreement is a legally binding contract between a service provider and a business or organization. It lays out the terms of service, including the scope of work, compensation, payment terms, service dates, and termination terms. It allows the employer and worker to clarify the terms of service and protect their legal rights.
Understanding state contractor laws and regulations is critical to meeting your legal obligations as a contractor, employee, or employer.
- Worker Classification: ABC Test
- Tax Structure: Flat Income Tax (Applied to interest and dividends income only)
- Definition: §282-A:9(III)
- At-Will Employment: Yes
Independent Contractor Definition
To avoid the negative consequences of employee misclassification, you should understand the legal difference between an employee and an independent contractor. Per New Hampshire law, an employee is any person who provides services to an employer in exchange for pay that is not an independent contractor.
A contractor, on the other hand, provides services on a contractual basis. They work independently of the employer’s supervision or control, within the scope of an independent contractor agreement.
In New Hampshire, independent contractors are not considered employees. While employees are entitled to certain benefits and considerations [1] , including minimum wage, overtime, unemployment benefits, and workers’ compensation, independent contractors are not.
Worker Classification Test
New Hampshire statutes use the ABC Test method to determine whether an individual is an independent contractor. To qualify as an independent contractor, the worker must meet the following criteria:
- They can perform their services outside the employer’s control or direction, within the scope of the contract.
- The services they provide are outside the standard course of business for the employer.
- They regularly engage in the type of service, profession, trade, or business provided in their New Hampshire independent contractor agreement.
In addition, independent contractors must meet the 12 criteria specified under NH RSA 281-A:2 VI(b)
Employees misclassified as independent contractors do not receive appropriate protection and benefits. Employers who misclassify employees may be liable for back taxes and other penalties.
Rights and Responsibilities
New Hampshire independent contractors cannot access workers’ compensation insurance through their contracted clients but can purchase their own coverage. Since they are not considered employees, independent contractors have more control over the scope of work and how it is performed. However, it is best to clearly outline the contractual terms using a New Hampshire independent contractor agreement.
State Taxes
Independent contractors shoulder a more significant tax burden for federal, state, and business profits taxes typically covered by the employer. Since the employer does not withhold taxes, independent contractors are subject to federal income and self-employment tax as 1099 employees.
Filing for Unemployment
Independent contractors in New Hampshire are not eligible for unemployment benefits because they do not pay unemployment taxes.
Sample
You can download a free New Hampshire independent contractor agreement template below in PDF or Word format:
