Independent Contractor Agreements

Independent Contractor Agreement Attorneys

Representing Texas Employers & Independent Contractors

Do you hire independent contractors for your business? Are you an independent contractor who needs a second set of eyes on a contract agreement? 

The contract law attorneys at Hendershot Cowart P.C. have been serving Texas businesses and independent contractors since 1987. We draft or review hundreds of business agreements every year, and routinely help our clients settle contract disputes. This experience gives us insights into the loopholes and weak points that others may try to leverage against your business – insights we can apply to your independent contractor agreement.

Ready to have an independent contractor agreement reviewed or drafted? Call (713) 909-7323 or contact our Houston-based attorneys online today to get started.

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What is an Independent Contractor Agreement?

An independent contractor agreement is a legal contract that outlines the terms and conditions of a working relationship between a business (the client) and an independent contractor (the freelancer or service provider). It essentially spells out the expectations for both parties and helps avoid misunderstandings or disagreements down the road.

Here are some key elements of a typical independent contractor agreement:

  • Scope of Work: This clearly defines the specific services or project the independent contractor will be performing for the client.
  • Payment Terms: The agreement outlines how much the contractor will be paid, the payment schedule, and the method of payment (e.g., hourly rate, fixed fee, etc.).
  • Deliverables and Deadlines: This section specifies what the contractor is expected to deliver and by when.
  • Independent Contractor Classification: The agreement clarifies that the contractor is classified as an independent contractor, not an employee. This has tax implications for both parties.
  • Ownership of Work: The agreement specifies who owns the intellectual property rights to any work created by the contractor during the project.
  • Confidentiality: This clause may be included if the contractor will be exposed to any confidential information or trade secrets of the client.
  • Term and Termination: The agreement outlines the duration of the project or contract, and the process for termination by either party.
  • Dispute Resolution: This section details how any disagreements arising from the contract will be addressed (e.g., negotiation, mediation, arbitration).

Independent Contractors vs. Full-Time Employees

The key difference between an independent contractor and a full-time employee boils down to control and how the work relationship is structured. 

Typically, a worker can be considered an independent contractor if:

  • They control their own hours, choose their tools and methods, and can take on work from multiple clients.
  • They are responsible for self-employment taxes (Social Security and Medicare) on their earnings.
  • They are hired for a specific project or task under a contract. The relationship ends when the project is completed, or the contract expires. There's no guarantee of ongoing work.
  • The specific aspects of how to complete a job duty are up to the worker.

By contrast, a worker is a full-time employee if:

  • The worker is subject to the company's policies, supervision, and work schedule.
  • They are eligible for employee benefits, and the employer withholds income taxes, Social Security, and Medicare taxes from the employee's paycheck.
  • They are hired for an ongoing position within the company. There's usually an expectation of a longer-term commitment, although employment can still be terminated by either party.
  • They typically use company equipment and resources to complete their job duties.

How We Help Hiring Companies with Independent Contractor Agreements

If you routinely bring on independent contractors to undertake certain tasks or complete “gig” work, let the contract attorneys at Hendershot Cowart P.C. help ensure that your business is protected. 

Some common legal risks we can help you avoid include:

  • Misclassification. The more control you exert over how the worker performs their job, the more likely it is that they will be considered an employee. Our attorneys will help you draft an independent contractor agreement that clearly defines the scope of work and the deliverables so you can step back and know that your business needs will be met without dictating the means and methods.
  • Liability. Independent contractors are not covered by your company's workers' compensation insurance. This means that if they are injured on the job, you could be liable for their medical bills and lost wages. To avoid this risk, your independent contractor agreements should require contractors to carry their own liability insurance.
  • Intellectual property rights. Make sure your written agreement assigns ownership of the work product to you. Otherwise, the independent contractor may own the copyright to any creative work they produce for you – a problem if you need to use the work in the future.

We have experience with a range of industries – including construction, manufacturing, oil and gas, healthcare, agriculture, transportation, and more – and understand how nuances in these industries can impact a work contract. Whether you need to draft, review, negotiate, or implement new independent contractor agreements, make us your first choice of legal counsel.

A Note About Independent Contractor Classification:

Entering into an independent contractor agreement with a worker does not automatically establish an independent contractor relationship.

On January 10, 2024, the U.S. Department of Labor published a final rule, effective March 11, 2024, revising the Department’s guidance on how to analyze who is an employee or independent contractor under the Fair Labor Standards Act (FLSA).

This new rule includes six factors to determine what the DOL refers to as the “economic reality” of the working relationship. The six factors are:

  1. Does the worker have an opportunity for a profit or loss based on their own initiative or judgment? If a worker determines their own rates, can accept or decline jobs as their discretion, and engages in marketing or advertising to expand their business, this suggests the worker is an independent contractor.
  2. Are any investments by the worker capital or entrepreneurial, i.e., is the worker investing in equipment, supplies, and/or marketing to improve their business, or as a requirement of the employer? The latter might indicate an employee-employer relationship.
  3. Is the work relationship project-based, non-exclusive, and limited in duration? That would suggest an independent contractor classification.
  4. Does the potential employer have control over the worker’s performance? For example, does the employer set the worker's schedule, reserve the right to supervise or discipline the worker, or set rates for the worker’s services? This would weigh in favor of an employee-employer relationship.
  5. Is the work performed an integral part of the potential employer's business? A worker doing tasks essential or critical to a company's principal business is more likely to be classified as an employee.
  6. Does the worker use specialized skills to perform the work and does the worker use their own initiative to market those skills? If a worker brings specialized skills to the work relationship, this alone does not indicate independent contractor status, unless the worker also markets their own skills to obtain work from multiple companies.

The attorneys at Hendershot Cowart P.C. can draft an independent contractor agreement that clearly outlines the terms of the working relationship to help prevent misclassification claims.

How We Help Independent Contractors

Before you sign an independent contractor agreement, call Hendershot Cowart P.C. at (713) 909-7323 .

Our independent contractor agreement lawyers can:

  • Review independent contractor agreements for loopholes, red flags, and ambiguous terms that could leave you at a disadvantage or at risk of contract disputes.
  • Negotiate changes to an independent contractor agreement, such as better rates or kill fees (payment for cancelled projects) on your behalf.
  • Draft a binding and detailed independent contractor agreement tailored to your business and for each major project, if necessary.
  • Help you establish a legal entity, such as an LLC, to help shield your personal assets from professional liability.
  • Litigate, arbitrate, or mediate breach of contract disputes as quickly and efficiently as possible.

Physician Independent Contractor Agreements

Many licensed healthcare professionals, including physicians, physician assistants, and nurses, enter into independent contractor agreements. As an independent contractor, you are not an employee but rather work with a hospital, private practice, or group practice as a “freelance” healthcare professional. 

Locum tenens assignments also usually involve an independent contractor agreement. 

As a business and healthcare law firm, we unite the expertise needed to draft and review enforceable physician independent contractor agreements that comply with both business and healthcare laws and regulations at the state and federal level – including Texas’ prohibition against the Corporate Practice of Medicine

We can guide you away from red flags and ambiguities that could stall or limit your career. And help you evaluate your compensation structure to evaluate whether you are paid fairly based on your geographic region, experience, and specialty. We can also help ensure that verbal agreements made during the recruitment process are clearly reflected in writing.

Here are a few of the questions the healthcare attorneys at Hendershot Cowart consider when reviewing a physician agreement:

  • Is this arrangement in compliance with federal healthcare regulations such as False Claims Act (FCA), Anti-Kickback Statute (AKS), Stark Law, and EKRA?
  • What are the duties and responsibilities? Are there on-call duties? How will on-call duties be assigned? 
  • Who will pay for medical malpractice insurance? Is there tail coverage? 
  • How long will the agreement be in place? What are the provisions for termination? 
  • If it’s a research engagement, who will own any intellectual property or patents?
  • How will contract disputes be resolved? 
  • Is there indemnity for intentional acts or negligence that expose the other party to liability? 
  • If there is a non-compete agreement? Is it in compliance with existing state and federal rules and regulations?

Protect your career from ambiguous or overly restrictive independent contractor agreements by seeking an attorney’s counsel before you sign. Agreements that limit your independent medical judgment or leave physician responsibilities to the hiring entity’s “sole discretion” can cause trouble in the working relationship, leading to disputes and possibly litigation or arbitration.

Call (713) 909-7323 or contact us online to speak with our attorneys about a physician independent contractor agreement review, compensation analysis, or our negotiation services.

Protect Your Business With Legal Advice From A Trusted Texas Law Firm

From drafting new agreements to defending or pursuing breach of contract claims, the independent contractor agreement attorneys at Hendershot Cowart P.C. are ready to put your mind at ease with a sound and thorough legal review of your agreement. 

Why choose our team? We have been reviewing business agreements and resolving contract disputes in Texas and beyond for more than 30 years. As a boutique business and healthcare law firm, we unite real experience with personal attention. And as a Texas business ourselves, we take a vested interest in our clients' success – from start to finish. 

We want to be your law firm for life. 

For an initial consultation or contract review, call (713) 909-7323 at any time.

Why Choose Our Team? Unwavering Commitment to the Success of our Clients
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    Let us put the full force of our 100+ years of combined experience to work for you.

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