Independent Contractor Agreement - Hawaii
INDEPENDENT CONTRACTOR AGREEMENT
(Hawaii)
TABLE OF CONTENTS
- Parties
- Scope of Services
- Term
- Compensation and Payment Terms
- Independent Contractor Status
- Tax Obligations
- Benefits Exclusion
- Insurance Requirements
- Intellectual Property and Work Product
- Confidentiality
- Non-Competition
- Indemnification
- Termination
- Dispute Resolution
- General Provisions
- Hawaii-Specific Notes
- Signatures
1. PARTIES
This Independent Contractor Agreement ("Agreement") is entered into as of [__/__/____] (the "Effective Date") by and between:
Client: [CLIENT FULL LEGAL NAME], a [________________________________] organized under the laws of [________________________________], with a principal address at [________________________________] ("Client");
Contractor: [CONTRACTOR FULL LEGAL NAME], a [________________________________] with a principal address at [________________________________], Tax ID/SSN: [________________________________] ("Contractor").
2. SCOPE OF SERVICES
2.1 Contractor shall perform the following services ("Services"):
[________________________________]
2.2 Contractor shall deliver the following deliverables ("Deliverables"):
[________________________________]
2.3 Contractor retains sole discretion over the means, methods, techniques, and procedures for performing the Services, subject only to the results and specifications agreed upon by the Parties.
3. TERM
3.1 This Agreement shall commence on [__/__/____] and continue until [__/__/____], unless earlier terminated pursuant to Section 13 ("Term").
3.2 The Parties may extend the Term by mutual written agreement.
4. COMPENSATION AND PAYMENT TERMS
4.1 Client shall pay Contractor [________________________________] for the Services as follows:
☐ Fixed fee of $[________________________________]
☐ Hourly rate of $[____] per hour
☐ Per-project rate of $[________________________________]
☐ Other: [________________________________]
4.2 Contractor shall submit invoices [________________________________] (e.g., monthly, upon milestone completion).
4.3 Client shall pay each invoice within [____] days of receipt.
4.4 Contractor is responsible for all expenses incurred in performing the Services unless otherwise agreed in writing.
5. INDEPENDENT CONTRACTOR STATUS
5.1 Relationship. The parties intend an independent-contractor relationship. Actual worker classification under applicable tax, labor, and other law depends on how the work is performed, including control, financial arrangements, and the parties' relationship. Contractor may not bind Client or act as its agent without written authorization.
5.2 Hawaii unemployment-insurance test (HRS § 383-6). Services performed for wages or under a contract of hire are employment under that chapter unless the department is satisfied that all three statutory conditions are met. The Parties shall verify the actual facts before relying on the following statements:
(A) Freedom from Control and Direction. Contractor has been and will continue to be free from control or direction over the performance of the Services, both under this Agreement and in fact.
(B) Outside Usual Course of Business or Premises. The Services are performed either outside the usual course of Client's business or outside of all the places of business of Client.
(C) Independently Established Trade or Business. Contractor is customarily engaged in an independently established trade, occupation, profession, or business of the same nature as the Services. Contractor has a proprietary interest in the business, demonstrates continuity, and functions as an independent business enterprise.
5.3 Contractor shall not hold itself out as an employee of Client and shall have no authority to bind Client.
6. TAX OBLIGATIONS
6.1 If Contractor is properly classified as an independent contractor under applicable law, Client will pay Contractor without employee payroll withholding. The Parties shall comply with any withholding duty that applies to the actual relationship.
6.2 Contractor is responsible for income, self-employment, and Hawaii General Excise Tax obligations applicable to amounts paid under a properly classified independent-contractor relationship.
6.3 Client shall issue Form 1099-NEC or another information return when required by current federal law and IRS instructions.
6.4 Contractor shall provide Client with a completed IRS Form W-9 prior to commencement of Services.
7. BENEFITS EXCLUSION
7.1 The Parties do not intend this Agreement to provide employee benefits. Eligibility for statutory workers' compensation, unemployment insurance, temporary disability insurance, and other protections depends on applicable law and the actual relationship.
7.2 Client shall address any unemployment-insurance contributions required by the actual relationship under applicable law.
8. INSURANCE REQUIREMENTS
8.1 Contractor shall maintain, at Contractor's own expense, the following insurance coverage during the Term:
☐ Commercial general liability insurance with minimum coverage of $[________________________________]
☐ Professional liability / errors and omissions insurance with minimum coverage of $[________________________________]
☐ Workers' compensation insurance (if Contractor employs others)
☐ Other: [________________________________]
8.2 Contractor shall provide certificates of insurance upon Client's request.
9. INTELLECTUAL PROPERTY AND WORK PRODUCT
9.1 All Deliverables, work product, inventions, and materials created by Contractor in the course of performing the Services ("Work Product") shall be the sole and exclusive property of Client.
9.2 Contractor hereby assigns to Client all right, title, and interest in and to the Work Product, including all intellectual property rights.
9.3 To the extent any Work Product constitutes a "work made for hire" under federal copyright law (17 U.S.C. § 101), Contractor agrees that Client is the author.
9.4 Contractor shall execute all documents reasonably necessary to perfect Client's ownership of the Work Product.
10. CONFIDENTIALITY
10.1 "Confidential Information" means all non-public information disclosed by either Party, including business plans, client lists, financial data, trade secrets, and technical information.
10.2 Each Party shall hold the other Party's Confidential Information in strict confidence and shall not disclose it to third parties without prior written consent.
10.3 Confidentiality obligations shall survive termination of this Agreement for a period of [____] years.
11. NON-COMPETITION
☐ Included. During the Term and for [____] months thereafter, Contractor shall not directly compete with Client within [________________________________] (geographic area) in the following activities: [________________________________].
☐ Not included. The Parties have elected not to include a non-competition provision.
12. INDEMNIFICATION
12.1 Contractor shall indemnify, defend, and hold harmless Client and its officers, directors, employees, and agents from third-party claims, damages, losses, and reasonable expenses (including reasonable attorneys' fees) to the extent caused by Contractor's breach of this Agreement or negligent or willful acts or omissions. This allocation does not transfer Client's own tax, wage, insurance, or other statutory duties, and a claim about worker classification alone does not trigger indemnity.
12.2 Client shall indemnify, defend, and hold harmless Contractor from any claims, damages, losses, and expenses arising from Client's breach of this Agreement or negligent acts or omissions.
13. TERMINATION
13.1 Either Party may terminate this Agreement upon [____] days' written notice.
13.2 Either Party may terminate immediately upon written notice if the other Party materially breaches this Agreement and fails to cure within [____] days of notice.
13.3 Upon termination, Contractor shall deliver all completed and in-progress Work Product to Client and shall be compensated for Services satisfactorily performed through the termination date.
14. DISPUTE RESOLUTION
14.1 The Parties shall first attempt to resolve disputes through good-faith negotiation.
14.2 If negotiation fails, disputes shall be resolved by:
☐ Mediation in [________________________________], Hawaii, followed by binding arbitration under the rules of [________________________________].
☐ Binding Arbitration in [________________________________], Hawaii, administered by [________________________________].
☐ Litigation in the courts of the State of Hawaii, [________________________________] Circuit.
14.3 This Agreement shall be governed by and construed in accordance with the laws of the State of Hawaii.
15. GENERAL PROVISIONS
15.1 Entire Agreement. This Agreement constitutes the entire agreement between the Parties and supersedes all prior negotiations and agreements.
15.2 Amendments. No modification shall be effective unless in writing and signed by both Parties.
15.3 Severability. If any provision is held unenforceable, the remaining provisions shall continue in full force and effect.
15.4 Assignment. Contractor may not assign this Agreement without Client's prior written consent.
15.5 Notices. All notices shall be in writing and delivered to the addresses set forth above.
15.6 Counterparts. This Agreement may be executed in counterparts, each of which shall be deemed an original.
16. HAWAII-SPECIFIC NOTES
Unemployment insurance classification: HRS § 383-6 treats services performed for wages or under a contract of hire as employment under Chapter 383 unless the Department of Labor and Industrial Relations is satisfied that all three listed conditions are met. This Chapter 383 test does not determine classification under every other worker-protection program. HAR § 12-5-2 provides additional factors.
General Excise Tax (GET): Independent contractors in Hawaii are subject to the General Excise Tax on gross receipts. Contractors should obtain a GET license from the Hawaii Department of Taxation.
Temporary Disability Insurance (TDI): Hawaii's Temporary Disability Insurance law (HRS ch. 392) applies to employees. Misclassification can expose employers to TDI back-contribution liability.
Misclassification Penalties:
- Assessment of unpaid wages, back wages, and additional penalties with interest
- Administrative penalties and collection mechanisms for delinquent contributions
- DLIR enforcement actions (e.g., $130,367 in wages and $13,037 in penalties recovered in reported cases)
Key Case Law:
- Spar Marketing Services, Inc. v. State of Hawaii, DLIR, CAAP-13-0001140 (Haw. Ct. App. 2019) (ABC test application)
- Bailey's Bakery v. Tax Commissioner, 38 Haw. 16 (1948) (early IC classification principles)
17. SIGNATURES
CLIENT:
Signature: [________________________________]
Printed Name: [________________________________]
Title: [________________________________]
Date: [__/__/____]
CONTRACTOR:
Signature: [________________________________]
Printed Name: [________________________________]
Title: [________________________________]
Date: [__/__/____]
This document is a template provided for informational purposes only. It does not constitute legal advice. Consult a qualified Hawaii attorney before execution.
About this template
- Last updated
- November 4, 2026
- Jurisdiction
- Hawaii
- Category
- Contracts & Agreements
Legal authority
- HRS § 383-6 (ABC Test — Employment Security)
- HAR § 12-5-2 (Administrative Rules — IC Factors)
- HRS § 383-71 (Penalties)
- HRS § 388-10 (Wage and Hour)
A contract is a written record of what two or more parties agreed to and what happens if someone does not follow through. Clear language, defined terms, and clean signature blocks keep disputes small and enforceable. The most common mistakes in contracts come from vague promises, missing details about timing or payment, and skipping standard protective clauses like governing law and dispute resolution.
Not legal advice
This template is provided for informational purposes. We recommend having an attorney review any legal document before signing, especially for high-value or complex matters.
Checked against the law it cites
The statutes this template relies on are listed under Legal authority.
HRS § 383-6 (checked November 2, 2026): "The individual has been and will continue to be free from control or direction over the performance of such service, both under the individual's contract of hire and in fact;"
IRS Topic 762 (Independent Contractor vs. Employee) (checked November 2, 2026): "Under the common law, you must examine the relationship between the worker and the business. You should consider all evidence of the degree of control and independence in this relationship. The facts that provide this evidence fall into three categories – behavioral control, financial control, and relationship of the parties."
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