Over the last decade, the rise of the “gig economy” has seen businesses rely on freelancers and independent contractors more frequently than in recent history. Gig workers enjoy flexibility, but they also have to deal with unethical employers who are ready to take advantage of their status.
If you’re an independent contractor, you must understand your labor rights in order to protect yourself against financial instability, unfair treatment from clients, and lack of benefits.
Independent contractor rights are certain legal entitlements and protections that independent contractors, rather than traditional employees, have. In the US, an independent contractor is someone who offers their services to a business and is paid for the work they provide and taxed for this work via a 1099 form. This is different from a traditional employee who is taxed according to information on their W2 form.
For tax purposes, the most important of these is that the contractor has the right to control when and how they complete their work.
This level of autonomy and control is what makes someone an independent contractor, regardless of what their actual job title is. Since independent contractors typically don’t have access to company benefits like retirement plans or healthcare, there are rights associated with work contracts that mean you should be paid on time, treated fairly, and have independence to control how the work is completed.
Using contract management software is one of the best ways to stay on top of all freelancer and self-employment contracts you have, in case you need to reference these later if your rights are violated.
You have to figure out how to protect your entitlements before you begin working as a contractor or freelancer with any company. Along with the particulars of the work you’re hired to do, most of your rights concern your finances because how you’re paid and taxed flags you as an independent contractor rather than an employee. You’ll be better off in the long run if you understand these rights ahead of time, so let’s begin.
Ask any freelancer, and they’ll tell you the same thing – always have a contract! They protect you and the clients you work with.
Contracts should always detail payment specifications and the scope of the work. Make sure yours clearly outlines your status as an independent contractor instead of an employee so federal or state agencies understand the nature of your relationship with the business for tax purposes.
One of the main perks of being self-employed is freedom with regard to how you want to work. Even though clients pay for projects, they should trust in your expertise and let you perform your duties as you see fit.
Be aware that many businesses list freelancer jobs that still require contractors to work certain hours. But if you’re not getting the benefits of being an employee at the company, you shouldn’t be subject to their work schedule.
As part of your right to control, you should always have the freedom to decide when and where you want to complete your work. The type of work you do most likely determines the “where”.
For example, a plumber or construction worker needs to be on-site due to the nature of the work. But a copywriter can handle their responsibilities just as easily from a coffee shop as they can in an office.
There may be some instances where you need to be available to speak to a client at a particular time, meet a certain deadline, or work from a set location. But the point here is that, as an independent contractor, you only need to adhere to what is written in your contract after you negotiate with the client on a solution that works for both of you.
Most employees receive their pay on a set schedule. As a contractor, it’s up to you to decide how you want to be paid. Make sure to detail your terms of payment in each contract.
Remember that as an IC, you are responsible for paying taxes. Your clients don’t withhold money for social security or any other contributions. Again, this should be outlined clearly in your contract.
Working with a number of different clients gives you the opportunity to vary your income and expand your network. Because of this, your contracts should state that you have the right to market your services and work with other companies. If you’re signing the client’s contract rather than providing your own, always look for non-compete clauses.
Some may be reasonable, such as not working with another client in the same industry within a certain time period, but this should apply to specific competitors for specific durations. You should always negotiate with a client if contracts aren’t clear about this subject.
You may need additional support to complete some projects. In that case, contracts should state whether or not you have a right to hire your own team. Clients sometimes leave this out of their contracts or include a clause that says they must approve any sub-contracting in advance.
If you already have a team that you work with, make sure your clients know this and verify it in your contracts. This is especially important if the client pays your team directly. This means they also need to be paid as independent contractors, and they have the same rights as you.
people are expected to work as freelancers in the U.S. by 2027, making up more than half of the total US workforce.
Source: Statista
When you’re self-employed, you’re responsible for providing your own benefits, employing and paying your staff, and making sure you’re being paid for the work you do.
The client has no responsibility to you regarding vacation or sick time, healthcare coverage, or retirement plans. This saves them a significant amount of money, which is why many choose to work with freelancers instead of hiring employees.
Even if you and the client believe you’re working as an independent contractor, the IRS and state labor departments have their own definitions. At any point, you have the right to challenge your employment status, particularly if the IRS lists you as one type of employee and your client records your work differently.
Information like job location, client type, and your level of agency are all used to determine your employment status. If you’re ever unsure, work with an employment attorney to help you navigate this component.
As an independent contractor, you should handle your work contracts with great care. Many freelancers simplify their workload with contract management software that helps them create, track, and monitor formal agreements.
To be included in the contract management software category, platforms must:
* Below are the top five contract management software solutions from G2’s Winter 2024 Grid Report. Some reviews may be edited for clarity.
PandaDoc allows both individuals and teams to create, manage, and e-sign documents. With a centralized system for storing and searching past documents, it provides a way for users to build accurate, on-brand contracts and offers custom templates with a drag-and-drop editor.
“The ability to create a document, drop fields into place, format things, and send it off with reminders set makes my job a lot easier. Pricewise, PandaDoc is extremely reasonable when compared to Docusign and others who charge significantly more.”
- PandaDoc Review, Phil G.
“Takes a bit of time to learn template builder (or you pay for them to build for you). Setting up enterprise-level integrations to Salesforce can take time to learn. The document emails sent to recipients are simple and not very customizable”
- PandaDoc Review, Deb S.
LinkSquares is a tool powered by artificial intelligence (AI) that handles contracts and other legal documents. It’s an end-to-end contract lifecycle management platform where everything from first draft to final signature live in one place.
“LinkSquares creates efficiencies in contracting that are essential for a fast-paced business environment, regardless of the size of your internal legal department.The dashboard metrics provide valuable insights into workloads and turnaround times so that all team members can operate at peak performance and internal stakeholders have real-time status updates and insights into the efficiencies of the contract review process.”
- LinkSquares Review, Melissa S.
“The search function could be tweaked to make it a little easier to find specific contracts. The report outputs could be improved by providing visualization tools (charts, graphs, etc) that would help users better interpret the data that the reports generate.”
- LinkSquares Review, Jonathan S.
GetAccept is digital sales room software that helps sales and revenue-driven teams document workflows and sign contracts more easily. Freelancers and independent contractors use it to build a contract in four steps.
“The interface is exceptionally user-friendly and includes all the features necessary for digital e-signing. I appreciate how GetAccept is continually enhancing customer value with new tools. The Deals Room is an outstanding feature that offers immense potential.”
- GetAccept Review, Robin Rawand K.
“I think the downside is the reporting. It's not so easy to overview and it's difficult to sort out the information we want. I know it's not a CRM-tool, but there is a need for some improvement.”
- GetAccept Review, Stefan L.
With Square Invoices, you can bill clients and quickly receive payments.Use it to manage documents associated with individual projects such as proposals and contracts. Square Invoices makes it easy to track invoices, send reminders, and accept fees via card or ACH bank transfer 24/7.
“I like that I am able to input all my customer information for future orders. Helps me organize all my invoices in one place and keep better track of them. I like how I can add and save my items as well. I like the visual of how they are organized in Square. It lets us see what's paid and what's pending. Very convenient and easy.”
- Square Invoices Review, Abby L.
“Once you enter a custom field, it is apparently there for life Even hitting "remove" doesn't seem to do any good.”
- Square Invoices Review, Sam G.
Jotform Sign uses automated features and e-signing tools to help you create and complete legal documents like contracts, waivers, lease agreements, and consent forms. Users can choose from over 600 ready-made templates or build a document from scratch to include unique branding.
“Jotform Sign is easy to use. Drag and drop the signature box where you want it on your form. Send the form you want to be signed in multiple ways. I use the link provided to me after publishing my finished form. The form can be signed using a touchscreen computer, tablet, or smartphone. If the receiver does not have a touchscreen device, they can sign your form with a mouse. I use Jotform Sign to collect W9 data for my subcontractors who I will send an 1099 at the end of the year.”
- Jotform Sign Review, Ralph M.
“I'd love to see the ability to forward completed forms as password protected PDFs. I also would like to see a different interface for viewing submissions. I'd like to be able to categorize all my forms by one client name.”
- Jotform Sign Review, Morgan W.
For most independent contractors, working as a self-employed freelancer is one of the best career decisions they’ve ever made. They have the freedom to work where and when they want, with people that they’ve chosen. But sometimes difficult issues arise, even with contracts in place. Know your rights as an independent contractor so you can keep yourself protected and do your best independent work in the self-employed years ahead.
Get your freelance contracts signed quickly and easily using e-signature software that lets anyone sign from anywhere in the world.
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