Free Independent Contractor Agreement Template

INDEPENDENT CONTRACTOR AGREEMENT

1099 Service Agreement · Governed By The Law Of The State Of New York

This Independent Contractor Agreement (this "Agreement") is entered into as of January 1, 2026 by and between Nexus Digital Solutions LLC (tel. (212) 555-0190 · email contracts@nexusdigital.com) ("Client") and John M. Hartfield (tel. (347) 555-0288 · email john@hartfielddev.com) ("Contractor"), an independent contractor. This Agreement is governed by the law of the State of New York. The Parties agree as follows:

Contractor agrees to perform the following services for Client (the "Services"): Design, develop, and deploy a customer-facing e-commerce platform using React.js (front-end), Node.js/Express (back-end), and PostgreSQL. Deliverables: (1) approved UI/UX mockups; (2) functional web application with catalog and cart; (3) OAuth 2.0 + JWT authentication; (4) Stripe payment integration; (5) documented REST API; (6) AWS deployment with CI/CD and technical handoff.. Contractor shall perform the Services in a professional and workmanlike manner consistent with applicable industry standards and shall determine the method, details, and means of performance subject to the results required by this Agreement.

This Agreement commences on January 1, 2026 and continues through June 30, 2026, unless earlier terminated under its terms. Either Party may terminate immediately on written notice if the other materially breaches and fails to cure within ten (10) days. On termination, Client shall pay Contractor for all Services satisfactorily performed through the termination date.

In consideration for the Services, Client shall pay Contractor at an hourly rate of $125.00 per hour, payable on a monthly basis and within thirty (30) days of invoice receipt (Net 30). Contractor is solely responsible for all costs, tools, equipment, and materials used to perform the Services — a strong indicator of independent-contractor status. Late payments accrue interest at 1.5% per month or the maximum rate permitted by the law of the State of New York, whichever is less.

Freelance-Worker Payment Protection (New York). Where the Services are worth $800 or more, N.Y. Gen. Bus. Law Art. 44-A §§1410 et seq. (Freelance Isn’t Free Act) requires a written contract and payment by the stated date or, if none is stated, within 30 days of completion. This Agreement satisfies that written-contract requirement. Statewide since Aug 28, 2024 (the Act was moved out of the Labor Law and codified as GBL Article 44-A). For any freelance engagement worth $800 or more (single contract or aggregate over 120 days), the hiring party must provide a WRITTEN contract itemizing services, value, and the payment date, and must pay by that date or, if none is stated, within 30 days of completion. Remedies include DOUBLE DAMAGES, injunctive relief, and attorney fees; the Attorney General may also sue for a pattern or practice.

The Parties expressly intend that Contractor is an independent contractor and not an employee, partner, agent, or joint venturer of Client for any purpose, including federal and state taxation, wage-and-hour law, workers’ compensation, and unemployment insurance.

Federal Classification Framework. Contractor’s status is assessed under U.S. Department of Labor Independent Contractor Rule, 29 C.F.R. Part 795 (the 2024 six-factor "economic-reality" totality test) and the IRS common-law test, which weighs three categories of evidence — behavioral control, financial control, and the relationship of the parties (IRS Rev. Rul. 87-41, 20-factor analysis), which weigh three categories of evidence:
• Behavioral control — Contractor retains the right to control how the work is performed, sets its own hours and methods, and is not subject to Client’s direction over the means of performance.
• Financial control — Contractor furnishes its own tools and resources, bears its own business expenses, may realize profit or loss, and is free to offer services to other clients.
• Relationship of the parties — the Parties intend an independent-contractor relationship, no employee benefits are provided, and the engagement is project-based rather than indefinite employment.

The 2024 economic-reality rule (29 C.F.R. Part 795) is currently in effect, but on February 26, 2026 the DOL issued a Notice of Proposed Rulemaking (RIN 1235-AA46) to rescind it and restore the January 7, 2021 rule, which centers the analysis on control and entrepreneurial opportunity; the DOL has paused enforcement of the 2024 rule pending that rulemaking. The federal test is therefore in transition. Nothing in this Agreement waives the Fair Labor Standards Act (29 U.S.C. §201 et seq. (Fair Labor Standards Act)).

State Classification Standard (New York). This State applies the common-law right-to-control test under New York common-law right-to-control test (Bynog v. Cipriani Group, 1 N.Y.3d 193 (2003)). New York applies the common-law right-to-control / degree-of-supervision test — it has NOT adopted a statewide ABC test. Courts weigh control over the means and methods of work, schedule, provision of tools, and whether the work is part of the regular business of the hirer.

Taxes, 1099 Reporting, and Benefits. Contractor is solely responsible for all federal, state, and local taxes on the compensation, including self-employment tax (IRC §§1401–1402 (self-employment tax; Schedule SE)). Client shall not withhold income, Social Security, or Medicare taxes; Client shall obtain a completed IRS Form W-9 and report payments on IRS Form 1099-NEC, required under IRC §6041A for non-employee compensation of $600 or more. Contractor is not entitled to any employee benefits (health insurance, retirement, paid leave, workers’ compensation, or unemployment benefits) from Client.

This Section supplements the Independent Contractor Status clause with the representations and acknowledgments that strengthen the engagement against a reclassification challenge.

(a) Behavioral and Financial Control Representations. Contractor represents that Contractor: (i) controls the sequence, methods, and details of the work; (ii) sets its own schedule and place of work; (iii) supplies its own tools, equipment, and materials; (iv) bears the opportunity for profit and the risk of loss; (v) may engage subcontractors and serve other clients during the term; and (vi) is not economically dependent on Client for all or substantially all of its income.

(b) Section 530 Safe Harbor. The Parties intend to satisfy Section 530 of the Revenue Act of 1978 (federal employment-tax safe harbor), which relieves a business of reclassification liability where it had a reasonable basis for treating the worker as a contractor, treated all similar workers consistently, and filed all required IRS Form 1099 returns. Client represents that it has a reasonable basis for treating Contractor as an independent contractor, that it treats all similarly situated workers consistently, and that it will file all required IRS Form 1099 returns. Contractor shall cooperate in maintaining the records supporting this treatment.

(c) Workers’ Compensation Exclusion. Contractor is not covered by Client’s workers’ compensation insurance and is responsible for obtaining any workers’ compensation coverage required of self-employed persons or for Contractor’s own employees under the workers’-compensation law of the State of New York.

(d) Unemployment Insurance Exclusion. The engagement is not covered employment for state unemployment-insurance purposes, and Contractor shall not be entitled to unemployment benefits based on the compensation paid under this Agreement, to the extent permitted by the law of the State of New York.

(e) Misclassification Exposure. Misclassifying an employee as an independent contractor can expose Client to back taxes, unpaid overtime, penalties, and interest under federal and New York law. The representations above are intended to support the Parties’ intended classification.

All work product, deliverables, inventions, and materials created by Contractor in performing the Services (the "Work Product") shall belong exclusively to Client. Because an independent contractor (not an employee) retains copyright by default absent a written assignment (17 U.S.C. §§101, 201(b) (work made for hire)), to the extent eligible the Work Product shall be a "work made for hire"; and to the extent it is not, Contractor irrevocably assigns it to Client under 17 U.S.C. §204(a) (copyright) and 35 U.S.C. §261 (patent), and agrees to execute any further instruments needed to perfect Client’s ownership. Contractor warrants the Work Product will not infringe any third-party intellectual property right.

Contractor shall hold Client’s Confidential Information (business plans, financial data, trade secrets, customer lists, pricing, source code, and the like) in strict confidence, use it solely to perform the Services, and not disclose it without Client’s written consent. Trade secrets receive the protection of the federal Defend Trade Secrets Act (18 U.S.C. §§1836–1839 (Defend Trade Secrets Act of 2016)) and the trade-secret law of the State of New York. This obligation survives termination for three (3) years (and, for trade secrets, for as long as they remain trade secrets).

DTSA Whistleblower Immunity Notice (18 U.S.C. §1833(b)(3)). An individual is not criminally or civilly liable under any federal or state trade-secret law for disclosing a trade secret (A) in confidence to a government official or attorney solely to report or investigate a suspected violation of law, or (B) in a sealed court filing.

Contractor shall procure and maintain, at its own expense and for the term plus one (1) year, the following insurance:
(a) Professional Liability (Errors and Omissions) with minimum limits of $1,000,000 per claim;

Contractor shall provide certificates of insurance on request and at least thirty (30) days’ notice of cancellation. Maintaining the contractor’s own coverage further evidences independent-contractor status.

During the term and for twelve (12) months thereafter, Contractor shall not solicit Client’s employees, contractors, or customers with whom Contractor had material contact during the engagement, for a competing purpose.

Scope: Employees and customers with whom Contractor had material contact during the engagement.

This covenant is enforceable only to the extent reasonable under the law of the State of New York.

Contractor represents and warrants that: (a) Contractor has the full right and authority to enter into this Agreement and perform the Services without breaching any other obligation; (b) the Services will be performed in a professional and workmanlike manner; (c) the Work Product will not infringe any third-party intellectual property right; and (d) Contractor will comply with all applicable federal, state, and local laws, including applicable tax and licensing laws.

This Agreement shall be governed by and construed in accordance with the laws of the State of New York, without regard to its conflict-of-laws principles. Any dispute shall be resolved exclusively in the state or federal courts located in the State of New York, to whose jurisdiction and venue the Parties consent.

Entire Agreement: this Agreement is the entire agreement on its subject matter and supersedes all prior understandings. Amendment: only in writing signed by both Parties. Severability: an invalid provision is limited or severed and the remainder stays in effect. Counterparts and Electronic Signatures: this Agreement may be executed in counterparts, including by electronic signature, each deemed an original.

IN WITNESS WHEREOF, the parties have executed this Agreement as of the date indicated.