Self employed contractor agreement is an agreement between two parties where in one party pays the other a certain amount of money for goods and services rendered. The contracts provide that there is no employer-employee relationship between the parties, the contractor performs his services under his own direction and is not subject to supervision or directives of any kind, and compensation will be paid on a time and materials basis.
The benefits of self employed contractor agreement
- It protects the contractor
The contractor can sign a contract that does not bear his signature, without any authority and without his signature, he can be exploited as an employee by applying the laws of employment. Most of the time people feel that self employed restrictions mitigate on their freedom. Thus all their activities are restricted by their own decisions, they do not have to answer under any law or rules and they do not have to follow any rules or directives. The most best part is that they enjoy complete freedom in terms of payment, time scale and even the kind of work which they choose to do.
- It protects the employer
Self employed contractors work under their own terms and conditions when they are not supervised by the employer. Hence they are protected and can’t be taken advantage of as employees. This is because employee contracts are normally governed by legal rules which favor employers, so this type of agreement gives protection to both the parties. This agreement provides personal protection and limits the liabilities for employers like any other contract does, so that employers do not have to take responsibility for self-employed contractor’s activities or his decisions. The employer obtains control over aspects such as payment, time scales and work activity, but this kind of agreement can also be used for other purposes such as agreements between a professional person and his client or a buyer and seller.
- It guarantees payment
The self employed contractor agreement gives the contractor an opportunity to prove that he has worked legally and also provides guarantee of payment in case of any litigation. Whereas, if a person is hired as an employee, it is the employer who has to prove that he has paid the employee as per law and employee has to prove that he hasn’t worked for those days. But in self employed contract, the person getting compensation can claim his compensation from any authorized court with the help of this agreement. This agreement ensures protection for both parties and it also protects their complete rights. The agreement is signed before two witnesses for security reasons. However this agreement does not require registration with government or any state agency.
- It can be used to enter into contracts with remote workers
Self employed people, as a rule, are not regulated by any government agency, so most of the contract are not registered or recorded with state or central government. Most of the self employed individuals render their services in accordance with the guidelines established by their own bodies and businesses. Most of the self employed workers often find it very difficult to access credit limits or even obtain a loan because they don’t have legal documents such as employee’s contract etc. This agreement provides a legal way for all self-employed people to get themselves registered and apply for credit facilities as an individual without any restriction.