A New York independent contractor agreement is a document that details the conditions of a client-contractor relationship. This document can record the extent of services the contractor will perform, the payment schedule, the reimbursement of expenses, and other relevant terms.
- Worker Classification: Common Law
- Tax Structure: Graduated-Rate Income Tax
- Definition: New York Unemployment Insurance Law § 511
- At-Will Employment: Yes
Independent Contractor Definition
New York defines an employee as a worker performing a service for an employer under a contract for hire, in which the services that they perform for that company are exclusive to the company.
By contrast, an independent contractor is a self-employed worker who may enter an independent contractor agreement to do a set task for the business on their own time and through their own means. When the task is complete, the contract ends.
Worker Classification Test
New York uses common law to classify independent contract work. This system determines classification based on multiple factors, including the means by which the work is produced.
However, the final classification is based primarily on who has control over the results of the work. If the business retains control, the worker is classified as an employee. If the worker retains control, they’re an independent contractor.
Rights and Responsibilities
New York has robust independent contractor rights, especially in New York City. One of the most notable rights is the right to receive payment for their work, according to the New York City Freelance Isn’t Free Act. [1]
Independent contractors in New York City also have the right to:
- A written independent contractor agreement
- Payment in a full and timely manner
- Protection against retaliation from current or former clients
- Challenge a misclassification
Explore some other rights and responsibilities below:
State Taxes
Regarding taxes, New York defers to the IRS classification for independent contractors. Independent contractors are considered self-employed and subject to the self-employment tax.
Filing for Unemployment
Independent contractors are considered self-employed and thus cannot file for unemployment. However, there are a few instances in which an employer may refer to a worker as an independent contractor, but the law considers them an employee. [2]
In these cases, employees may file for unemployment. Any contracts which claim to waive the right to unemployment are considered invalid in New York State.
If you think you might be entitled to unemployment, refer to the worker classification tests and independent contractor definitions in the state. If you are legally considered an employee, you may be eligible for unemployment.
Compensation for Work Injuries
Contractors aren’t eligible for workers’ compensation. If they get injured while performing their expected services, they can use workers’ compensation insurance that they purchase for themselves.
Sample
Review our New York independent contractor agreement below, which you can download in PDF or Word format:
