A California Independent Contractor Agreement outlines the terms and conditions of a contract between a client and an independent contractor. The agreement documents the details of the independent contractor, what services they will provide, and distinguishes them from an employee of the business for tax and legal purposes. The agreement helps to establish a working relationship between both parties.
What is an Independent Contractor in California?
In California, an independent contractor is separate from normal employees, which have led the state to adopt contractor laws to prevent misclassification.
Independent contractors typically work on one-off projects for a company and work as an independent entity. Typical job titles of an independent contractor include:
- Freelance writers
- Web designers
- Construction workers
- Graphic designers
California uses the ABC test to determine whether someone is an independent contractor.
What is the ABC Test?
The ABC test determines whether an employee is an independent contractor. The ABC test was formed for the purpose of employment laws in California. To clarify laws regarding an independent contractor, unemployment insurance, wages, and hours worked. To determine if someone is an independent contractor, the following must be met:
- According to actuality and contract, the individual is free from the control and directives of the organization hiring them to complete a specific job.
- Work completed by the individual is not normally done by the agency hiring them.
- The individual being hired has their own business or trade, previously established as separate, yet is the same type of work being hired.
Since Proposition 22 was adopted, individuals performing gig-type work are no longer subjected to the ABC test.
What is AB 5?
AB 5 is a bill signed into California law in September 2019 by the Governor. It addresses employment status when a business hires a person as an independent contractor. As part of AB 5, the ABC test must be used to determine if workers in the state of California are classed as employees or independent contractors.
What to Include in a California Independent Contractor Agreement?
When drafting an independent contractor agreement California template the following information should be covered:
- What services will be provided
- How services will be provided
- Where services will be performed
- Payment terms
- Obligations of the parties
- Intellectual property
- Any indemnities or warranties relevant to the job
- Termination of employment
Sample California Independent Contractor Agreement
Below you can download a California independent contractor agreement template in PDF and Word format:
