Independent Contractor and Work for Hire Agreement
The Independent Contractor and Work for Hire Agreement is designed for persons or business entities who wish to hire other persons or business entities to work on an independent contractor (that is, non-employee) basis in states other than California (There is a separate version of the Agreement for California businesses).
Merely calling such a person an independent contractor, rather than an employee, does not necessarily change the nature of the relationship. In other words, the relationship contemplated must properly be an independent contractor relationship; if it is, then this agreement will define the terms of the independent contractor relationship, in a manner generally favorable to the contracting party. Otherwise, an employment agreement should be used, and W-2 payroll status and payroll taxes, unemployment compensation, workers’ compensation, and the like will apply.
While there are many factors to consider, the key factor is control: If the worker has little or no control over the how, when, and where of performing the duties required, then that worker is likely an employee.
A secretary who is told to report every morning at 8 AM, answer the phone and file in accordance with company policy, take lunch between 12 – 1 PM, and to punch out at 5 PM, is a classic example of an employee. Such an employee typically incurs no expenses, takes no risk of profit or loss, and works for only one employer.
A computer consultant who is hired to perform computer network maintenance, but who can determine within reason when, how, where, and by whom (his or her employees or subcontractors may actually do the work) such maintenance is performed, and who has other clients, is a classic example of an independent contractor. If these declarations don’t ring true or sound appropriate for your business, the worker is likely properly classified as an employee, and the Independent Contractor and Work for Hire Agreement should not be used.
The Agreement provides that, to the maximum extent permissible under the U.S. Copyright Act, all copyright rights in work performed by the independent contractor under the Agreement shall vest in the hiring party. The Copyright Act, however, limits what items may be treated as work made for hire to certain narrow categories.
To the extent that the independent contractor’s work under the Agreement falls outside these categories – as will often be the case, in part or in whole – and with regard to other intellectual property rights, such as trademark and patents rights, over which the work for hire provisions cannot have any effect, all such intellectual property is transferred to the hiring party under the “back-up” provisions.
If you have any questions regarding the foregoing, or about the appropriateness of the Independent Contractor and Work for Hire Agreement for, or modifying it to fit your specific needs, you are encouraged to consult with a local employment law attorney.