Being an Independent Contractor
An independent contractor provides a service, but not as an employee. As an independent contractor, you define or negotiate your policies, procedures, and hours with the person or business (the client) that contracts with you.
As an independent contractor, you will need to charge a fee that amounts to a higher earnings-per-hour than you would normally receive as an employee because you'll need to provide for yourself many of the benefits otherwise paid for by an employer, including insurance, vacation time and marketing costs.
Define Your Business Arrangement
Be sure to define your business arrangement in writing. Specifically spell out the details, such as what you are responsible for providing and what the client will provide, so you can protect yourself legally and have an easy way of checking if you're meeting the client's expectations. Writing a contract also allows you to think through the details of your business arrangement before you make commitments or investments.
The Independent Contractor Agreement
Areas that an independent contractor agreement typically address are:
Services. This section specifies the types of services you will offer, your work days and hours (minimum/maximum), time allowed between client appointments, who is responsible for providing and maintaining equipment and supplies, and the procedure for accepting calls and making appointments.
Fees and Terms of Payment. Here you'll specify that you'll set your own fees and pay your own taxes.This section also specifies the arrangement for space rental and operating expenses. (This may be a percentage of fees or an actual or flat amount.) You'll also want to detail the procedure for collecting and remitting fee payments, as well as how client records will be managed.
Expense Reimbursements, Fringe Benefits, Insurance. This section specifies that the contractor is not eligible for any employer benefits of the client, that the contractor will provide proof of insurance (such as liability insurance), and that the client does not pay any taxes (including Workman's Compensation) on behalf of the contractor. Specify liability for any injury that might occur to you or to the client.
Term and Termination. Gives effective date of contract and spells out the rules for termination (usually 30 days notice by either party). Here, you might also include a clause about how you won't solicit patrons or employees for any reason for six months after contract termination.
Additional Provisions. Areas that might be included in this section include: the type of attire that is expected; maintenance and ownership of client records; whether or not the contractor may provide services for others during the term of the contract; and how disputes are to be settled between the contractor and the client.