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What Is A Contractor Agreement

While there are many ways to distinguish an employee from a contractor, here are some of the most common ways an employer (or client) can distinguish between the two types of employees. Contractual agreements vary or may have several changes depending on the contract being performed: The U.S. Department of Labor (DOL) and the Internal Revenue Service (IRS) regularly conduct company audits to find employees who have been wrongly classified as contractors. Startups can streamline the hiring process with an independent contractor using a standardized agreement. By using an independent contractor agreement template, you ensure that all members of your startup who are part of the recruitment process use a consistent and legally defensible document. Employers have to pay a portion of payroll tax to employees, while independent contractors file their own personal tax returns. .