This Independent Contractor Policy can be used by small businesses to provide
guidance to employees on what independent contractors are forbidden to do under the
independent contractor classification. Misclassifying employees as independent
contractors can result in stiff penalties and back-payment of employment taxes for the
company. This policy is ideal for small businesses or other entities that want to ensure
proper employee and independent contractor classification by providing guidance to
company employees and hiring managers.
INDEPENDENT CONTRACTOR POLICY
We at ____________________ [Instructions: Insert the Company’s name] (hereinafter
referred to as the “Company”) have established this Independent Contractor Policy to provide
formal guidance regarding Company’s position with respect to the hiring and treatment of
independent contractor workers (“I/C”). To avoid any potential IRS and other government
audits and/or other financial, tax and/or legal issues that may arise as a result of potential
misclassification of I/C, Company and its directors, officers, managers and employees shall
ensure that each I/C shall not:
1. Commence work until the I/C enters into a written I/C agreement with Company.
2. Receive any employee handbooks or company policy manuals.
3. Work at Company’s workplace, unless the nature of the services requires it.
4. Have set work hours.
5. Work full-time for Company, unless the nature of the services requires it.
6. Be supervised by, directed or trained by Company.
7. Be provided with assistants by Company.
8. Be provided with equipment or materials by Company, unless the nature of the services
9. Provide other services for Company outside the scope of the I/C agreement.
10. Have a title within Company.
11. Receive any business cards or stationery that have Company’s name on them.
12. Hold him/herself out as an employee of Company.
13. Be invited to Company meetings or functions.
14. Refer to the I/C as an employee.
15. Be paid a salary, or be paid on the same time or basis as Company employees; instead the
I/C should be required to submit invoices and the I/C should be paid at the same time and basis
that other outside vendors are paid.
16. Receive a tax form W-2 from Company; the I/C must receive tax form 1099.
17. Receive any employment benefits.
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18. Be given any additional or different work after completion of the original project without
entering into a new I/C agreement.
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