A North Dakota independent contractor agreement is a legal contract that defines the relationship between a business and an independent contractor. A client and a contractor can refer to this agreement to understand the agreed-upon services and details relating to the relationship, like the commencement and termination dates.
- Worker Classification: Common Law
- Tax Structure: Graduated-Rate Income Tax
- Definition: N.D. Cent. Code § 65-01-02(16)
- At-Will Employment: Yes
Independent Contractor Definition
An independent contractor is someone who provides services to customers and clients. Unlike employees, they do not regularly work for an employer. Instead, they provide services according to their own schedule.
Worker Classification Test
North Dakota uses the common law test for worker classification. This test consists of 20 factors, which the North Dakota Department of Labor and Human Rights evaluates. [1] Some of these factors include:
- Whether the worker is required to comply with the alleged employer’s instructions about where, when, and how the worker provides services
- Whether the worker receives training from the alleged employer
- Whether the alleged employer integrates the worker’s services into the business operations
- Whether the worker is only responsible for the result
- Whether the worker has a continuing relationship with the alleged employer
- Whether the alleged employer has established set hours for the worker
- Whether the worker works full-time
- Whether the worker works on the premises of the alleged employer
- Whether the worker submits written or oral reports to the alleged employer
A person doesn’t have to meet a certain number of factors to receive an employee classification versus an independent contractor classification. Rather, the N.D. Department of Labor and Human Rights considers the worker’s occupation/industry and the context of the situation.
Rights and Responsibilities
Independent contractors in North Dakota have the right to reject or accept specific projects based on their interests and availability. They can also decide how they’d like to complete specific tasks and work from wherever is convenient for them if they can still meet the project’s requirements.
State Taxes
Independent contractors are responsible for filing and paying their own taxes. Payers do not have to pay or withhold any taxes on payments to independent contractors. [2] Instead, they use Form 1099-NEC to report payments to independent contractors.
Filing for Unemployment
No, independent contractors cannot file for unemployment in North Dakota. Only employees can. North Dakota uses the common law test for worker classification for the purposes of unemployment insurance (N.D. Cent. Code § 52-01-01).
Compensation for Work Injuries
While employers in North Dakota who hire employees must carry workers’ compensation insurance [3] , workers’ compensation insurance doesn’t cover independent contractors.
Sample
Download our North Dakota independent contractor agreement in PDF or Word format below:
