A freelance contract establishes working terms between a freelancer (or “contractor”) and a person or company that requires their services. A clear freelance contract helps both sides understand what to expect from each other, so projects get sent in on time, and payments are made promptly.
What is a Freelance Contract?
A freelance contract is a document sent by an employer to a freelancer that explains the terms of their working relationship. It sets clear expectations between the two parties for a specific project over a set period of time. This document type is legally binding and ensures that everyone working on a given task is on the same page regarding service guidelines.
What is a freelancer?
A freelancer is an individual who works on one-off projects or tasks for businesses and organizations and is not committed to a particular employer on a long-term basis. Freelancers are generally self-employed and typically have multiple clients at one time and earn income per project. They are not company employees, and most freelance work is short-term.
When Do I Need a Freelance Contract?
You need a freelance contract for a single project over a clear time frame instead of a permanent, general work relationship. A company also may not involve freelance work as an official part of the company.
Note that this type of worker is not the same as a temporary or “temp,” who is often placed at a company through an independent staffing agency to fill a position for a short period, such as during an employee’s maternity leave. Temporary workers are technically staffing agency employees, whereas independent contractors are self-employed. You can also hire temporary employees using a temporary or fixed-term employment contract.
Independent contractors will generally cost a company less money than an employee does because they do not receive traditional work benefits such as health care, vacation pay, sick pay, or retirement.
Independent contractors usually work on their own schedules and are not expected to enter an office. Unlike salaried workers, freelance workers have no upward limit on their potential earnings. They are, however, expected to pay for out-of-pocket expenses unless approved by the company.
A company’s insurance does not cover the contractor, making freelancers responsible for obtaining their own insurance.
Common Uses of a Freelance Contract
A freelance contract has a wide variety of uses. There are many types of short-term projects that an individual worker can complete for a company. These are situations in which there is a specific task that the client needs the contractor to complete.
- A magazine hires a journalist to write an article
- A small business hires a programmer to create a website
- A theater company hires an actor to perform in a play
- A think tank hires a speaker to deliver their conference’s keynote address
- A family hires a pet sitter to watch their dog while they are on vacation
- A couple hires a photographer for their wedding
- A company hires a marketing consultant to increase awareness of their brand
- An office hires a plumber to fix leaky pipes
- A mother hires the next-door neighbor to watch her child for the evening
- A student hires a tutor to help them study for the SAT
If it seems like there’s a huge range of freelance jobs, you are right: contract workers are a growing part of the population. A 2018 poll by NPR and Marist found that an independent worker carries out one in five American jobs.
Interestingly, many independent contractors today work for a single client instead of multiple clients due to in-depth projects or work agreements. However, under the Fair Labor Standards Act, these workers still do not receive employee benefits, including overtime pay.
According to the Harvard Business Review, misclassifying employees as contractors has resulted in major wage losses for workers.
Companies usually look to freelance workers for projects that will not require extensive training or company equipment.
Without a freelance agreement, expectations of the freelancer and their required services may be unclear. Both an independent contractor and their client must have a common understanding of the project’s scope to avoid confusion or extra work. In addition, a freelance contract establishes to the IRS that the worker is not an employee of the company. Otherwise, the company may be expected to cover the individual’s Medicare and Social Security taxes and be responsible for any liabilities arising from the project. There are serious consequences for misclassifying a freelancer as an employee and vice versa, including large fines and potential jail time. You must understand the distinction between independent contractors and employees and the implications for yourself and/or your business. A 1099 form marks self-employment earnings for the IRS. A freelance worker earning over $600 from a company will receive a 1099 form. You can find instructions regarding this legal requirement on the IRS’s website. Freelance workers cannot have employees but delegate work to other independent contractors. There are many legal guidelines that a company must be aware of to treat its workers fairly. The Department of Labor’s website clearly explains the major employment laws in the US. A freelance agreement should detail the following specifications: A freelance contract normally addresses the following elements: The sample freelance contract below shows what a standard one looks like: Yes, a freelancer can write their own freelance contract. The easiest way is to use a freelance contract template or a builder, where you have to fill in the gaps and then download a completed contract in PDF or Word format. You shouldn’t need to seek legal advice when writing a freelance contract unless your relationship with a client is particularly complicated and requires complex terms and conditions. Yes, freelance writers should always have a written freelance contract. Oral agreements are easy but won’t protect you in a payment dispute. A written agreement protects both the freelance writer and the client. Contracts for freelancers are important to ensure both the freelancer and the client know what is expected of each other. Freelance contracts can be terminated. A good freelance contract will include a termination clause outlining why the contract can be terminated and if there will be any penalties for doing so before the project finishes. It will also include how much notice needs to be given to either party. A freelancer is typically hired for a single piece of work, such as a blog post. A contract employee, also known as an independent contractor or temporary employee, is generally employed for a more significant amount of time. A freelance contract can be as long as required. Whether it’s a short-term one-off piece of work or a regular ongoing project, a freelance contract can go on for any time. A short-term freelance contract is specifically for short-term work. It’s usually used for pieces of work or projects that will last no longer than two weeks. Consequences of Not Using a Freelance Contract
Consequences for the contractor
Consequences for the hiring company
What to Include in a Freelance Contract
General terms in a freelance contract
Freelance Contract Sample
Frequently Asked Questions
Can a freelancer write their own contracts?
Do freelance writers need a contract?
Can you terminate a freelance contract?
Is there a difference between freelance and contract work?
How long can a freelance contract be?
What is a short-term freelance contract?