Should companies have freelancers and consultants sign written independent contractor agreements?
Absolutely. Using a written agreement avoids later disputes by providing a written description of the services the IC is to perform, when they are to be performed and how much the IC will be paid. A written IC agreement can also help establish that a worker is an independent contractor. Although an agreement by itself is never enough to make a worker an IC, it will help show the IRS and other agencies that both you and the worker intended to create a hiring company-independent contractor relationship, not an employer-employee relationship. IRS training materials state that where all the other factors are evenly balanced, a written IC agreement may tip the scale to the IC side. But remember, an IC agreement is only useful if it’s obeyed. It will be useless if you treat a worker like an employee.
