Independent Contractor Agreement - New Jersey

NEW JERSEY INDEPENDENT CONTRACTOR SERVICES AGREEMENT

CLASSIFICATION WARNING: This Agreement documents facts; it does not create independent-contractor status. The hiring party must prove every ABC element under each applicable law.

DATED UPDATE NOTICE: On May 5, 2026, the New Jersey Department of Labor and Workforce Development announced adoption of N.J.A.C. 12:11, with an operative date of October 1, 2026. This form reflects law operative on July 22, 2026 and must be reviewed before use on or after October 1, 2026.

This Independent Contractor Services Agreement (the “Agreement”) is entered as of [__/__/____] by and between:

The Company and Contractor are each a “Party” and together the “Parties.”

1. SERVICES AND STATEMENTS OF WORK

1.1 Engagement

The Company engages Contractor to provide the services described in one or more signed statements of work (“SOWs”). Contractor accepts the engagement subject to this Agreement.

1.2 Required SOW Terms

Each SOW must identify:

• the services, deliverables, and objective acceptance criteria;
• project dates and requested deadlines;
• a fixed, milestone, per-project, or per-unit fee;
• invoice and payment dates;
• approved expenses;
• required licenses, insurance, and security controls;
• Company property, worksite, or system access;
• which Party supplies tools, equipment, personnel, and materials;
• Contractor's discretion over methods, sequence, staffing, and work time;
• Contractor's investment and opportunity for profit or loss;
• the Company's usual course and every place of business relevant to the Services; and
• Contractor's independently established business and evidence that it exists apart from this engagement.

1.3 Changes

A change to scope, price, or deadline is effective only in a writing signed by both Parties. The Company may define the desired result, specifications, lawful requirements, worksite rules, and requested deadlines without directing Contractor's day-to-day manner or means of performance.

2. TERM AND WORK OPPORTUNITIES

2.1 Term

This Agreement begins on [__/__/____] and continues until [__/__/____ / completion of all SOWs], unless earlier terminated under Section 12.

2.2 No Guaranteed Work; Nonexclusivity

Unless an SOW states otherwise, the Company is not required to offer a minimum amount of work. Contractor may accept or reject a proposed assignment without penalty and may provide services to others, subject to confidentiality and conflicts expressly identified in an SOW.

3. NEW JERSEY CLASSIFICATION REVIEW

3.1 Statutory ABC Test

NJDOL applies the test in R.S. 43:21-19(i)(6) under the Unemployment Compensation Law, Wage and Hour Law, Wage Payment Law, and other identified State wage, benefit, and tax laws. The putative employer must prove all three prongs:

1. Freedom from control. The worker has been and will continue to be free from control or direction over performance, both under the contract and in fact.
2. Outside course or places. The work is outside the usual course of the business for which it is performed or outside all places of business of the enterprise.
3. Independently established business. The worker is customarily engaged in an independently established trade, occupation, profession, or business.

Failure to prove any one prong means the service is employment for the law applying the test.

3.2 Prong A — Contract and Practice

The Company may specify contracted results, objective standards, lawful requirements, and deadlines. Contractor controls the methods, sequence, ordinary work time, personnel, and day-to-day performance. The Parties will preserve records showing actual practice, not merely contractual wording.

3.3 Prong B — Usual Course or Places of Business

Each SOW must describe the Company's usual course of business and all enterprise places of business relevant to the Services. The Parties must identify which statutory alternative they rely on and the facts supporting it:

☐ Services are outside the Company's usual course because [________________________________].

☐ Services are performed outside all enterprise places of business because [________________________________].

Working remotely or at a customer location does not eliminate the need for a fact-specific review of the statutory language.

3.4 Prong C — Independent Business

Contractor will document an independently established business that is not merely a name or registration created for this engagement, including as applicable:

• services marketed to the public;
• other current or prospective clients;
• recurring business expenses and liabilities;
• meaningful investment, tools, facilities, and personnel;
• business insurance and licenses;
• independent pricing and opportunity for profit or loss; and
• records showing the business can continue apart from the Company.

3.5 Misclassification Consequences

Under N.J.S.A. 34:1A-1.18, after finding a violation of a State wage, benefit, or tax law connected to misclassification, the Commissioner may assess an administrative penalty up to $250 per misclassified employee for a first violation and up to $1,000 per employee for a subsequent violation, plus a worker-directed penalty of up to five percent of gross earnings over the preceding 12 months. Other remedies, contributions, interest, penalties, and fees may also apply.

No indemnity, liability cap, contract label, or tax provision in this Agreement limits a worker's or government's nonwaivable rights.

3.6 Separate Workers' Compensation Review

New Jersey separately requires covered employers to maintain workers' compensation insurance or approved self-insurance. NJDOL states:

• a corporation operating in New Jersey must maintain coverage when one or more individuals, including officers, perform services for financial consideration;
• a partnership or LLC must maintain coverage when one or more individuals other than partners or LLC members perform services for financial consideration; and
• a sole proprietorship must maintain coverage when one or more individuals other than the principal owner perform services for financial consideration.

Out-of-state employers may also need coverage when an employment contract is entered in New Jersey or work is performed in New Jersey. Before work begins, the Parties will obtain a coverage analysis based on each entity, worker, location, and actual relationship.

3.7 Operational Commitments

The Parties state that, throughout the engagement:

☐ Contractor is free from control and direction under the Agreement and in actual performance.

☐ Company does not provide day-to-day supervision or mandatory training beyond safety, security, legal, worksite, or project requirements.

☐ Services are outside Company's usual course or outside every enterprise place of business, as documented in the SOW.

☐ Contractor operates an independently established business that can continue apart from Company.

☐ Contractor markets services to others and may accept or reject projects.

☐ Contractor supplies the ordinary tools, workspace, personnel, insurance, and business expenses listed in the SOW.

☐ Contractor bears meaningful investment and opportunity for profit or loss.

☐ The Parties maintain separate business, invoice, tax, insurance, and classification records.

If any statement is inaccurate, the Parties must revise the documents and practices and obtain New Jersey legal advice before work continues.

3.8 Reclassification

If an agency or court determines that Contractor or any individual performing Services is an employee for a particular law, the Parties will comply with that determination. Nothing in this Agreement waives wages, benefits, taxes, contributions, insurance, remedies, or other rights or obligations that cannot lawfully be waived.

4. COMPENSATION, INVOICES, AND TAXES

4.1 Fees

The Company will pay the fees stated in each SOW. Select the actual pricing method:

☐ fixed project price

☐ milestone price

☐ per-unit price

☐ other: [________________________________]

4.2 Invoices and Payment

Contractor will submit an itemized invoice [weekly / monthly / by milestone]. The Company will pay undisputed amounts by [SPECIFIC DATE / ____ DAYS AFTER RECEIPT].

The Company must identify a disputed item in writing within [____] days and pay undisputed portions when due. A classification, tax, or insurance concern does not by itself authorize withholding compensation already earned.

4.3 Expenses

Contractor bears ordinary business expenses. The Company will reimburse only expenses expressly approved in the SOW and supported by receipts.

4.4 Taxes and Information Reporting

Contractor is responsible for taxes and filings imposed on Contractor's business and personnel. The Company may report payments and withhold amounts when required by then-current federal or New Jersey law. The Parties will use current IRS instructions when determining whether and how to file Form 1099-NEC.

Tax reporting and withholding treatment do not determine worker status or eliminate liability imposed by law.

5. PERSONNEL AND SUBCONTRACTORS

5.1 Personnel

Contractor chooses, directs, and pays its personnel. Contractor is responsible for their qualifications, compensation, classification, supervision, and compliance with this Agreement, subject to obligations imposed directly on the Company by law.

5.2 Subcontractors

☐ Contractor may use qualified subcontractors without prior consent.

☐ Contractor must obtain the Company's written consent before a subcontractor receives access to Company systems, personal information, or a restricted worksite.

Before a subcontractor begins work, Contractor will provide a current workers' compensation certificate or written coverage analysis. Company approval does not establish classification or eliminate liability imposed by law.

6. INTELLECTUAL PROPERTY

6.1 Background Materials

Each Party retains ownership of materials developed independently of this Agreement and identified in the SOW as background materials.

6.2 Commissioned Works and Assignment

A specially ordered or commissioned work qualifies as a “work made for hire” under 17 U.S.C. § 101 only if it falls within a statutory category and the Parties expressly agree in a signed writing. To the extent a paid deliverable qualifies, the Parties agree it is a work made for hire for the Company.

As a separate fallback, upon full payment for the applicable deliverable, Contractor assigns to the Company all transferable right, title, and interest in that deliverable, excluding identified background and third-party materials.

6.3 Background-Material License

Contractor grants the Company a [perpetual / term-limited], [worldwide], [royalty-free] license to identified background materials embedded in a paid deliverable only to the extent needed to use that deliverable.

6.4 Third-Party Materials

Contractor will identify third-party materials and applicable license terms before delivery. The Company is not required to accept material whose license conflicts with the SOW.

7. CONFIDENTIALITY AND DATA SECURITY

7.1 Confidential Information

“Confidential Information” means nonpublic information disclosed for the engagement that is marked confidential or reasonably understood to be confidential. It excludes information Contractor documents was already known without duty, independently developed, lawfully received without restriction, or publicly available without breach.

7.2 Duties

The receiving Party will use Confidential Information only for this Agreement, disclose it only to personnel who need it and are bound to protect it, use reasonable safeguards appropriate to its sensitivity, and return or destroy it on request subject to lawful retention and routine backup practices.

7.3 Required Disclosure and Incidents

A Party may disclose information when legally required. When permitted, it will give prompt notice and reasonable cooperation regarding protective relief. Contractor will notify the Company without unreasonable delay after discovering unauthorized access to Company data.

8. LICENSES, INSURANCE, AND PERFORMANCE

8.1 Licenses

Contractor will maintain licenses and permits legally required for the Services and notify the Company promptly of a suspension, restriction, expiration, or lapse. Registration or licensing does not determine worker status.

8.2 Negotiated Insurance

During each SOW, Contractor will maintain the selected coverage:

☐ commercial general liability: $[____________]

☐ professional liability / errors and omissions: $[____________]

☐ automobile liability: $[____________]

☐ cyber / privacy liability: $[____________]

☐ New Jersey workers' compensation, policy [____________], expiring [__/__/____]

☐ written coverage analysis by New Jersey counsel or insurance professional: [____________]

Insurance documents are evidence of coverage only and do not determine worker status.

8.3 Performance and Acceptance

Contractor will perform professionally, safely, and according to the SOW. The Company will review each deliverable within [____] business days. A rejection must identify the unmet acceptance criterion. Contractor will correct a valid nonconformity within [____] business days or another agreed period.

8.4 Records

Each Party will maintain records reasonably needed to support invoices, every ABC element, licenses, insurance, subcontractor certificates, security obligations, and tax reporting for [____] years or any longer period required by law.

9. REPRESENTATIONS AND COMPLIANCE

Each Party represents that it has authority to sign this Agreement. Contractor further represents that:

1. performance will not breach another agreement;
2. Contractor will not introduce third-party material without authority and required notices;
3. Contractor will comply with laws specifically applicable to the Services;
4. Contractor is not relying on this Agreement, registration, insurance, work location, or tax reporting alone to establish status; and
5. information provided in the classification checklist is accurate and will be updated if circumstances change.

This Agreement contains no noncompetition or worker non-solicitation covenant. Any requested restriction must be separately reviewed and drafted by New Jersey counsel under then-current law.

10. BENEFITS AND STATUTORY RIGHTS

The Company does not promise Contractor participation in an employee benefit plan unless an SOW, governing plan document, or applicable law provides otherwise. This statement does not decide status or waive a benefit, wage, tax, workers' compensation, unemployment, disability, or other right that follows from a legal determination that an employment relationship exists.

11. INDEMNITY AND LIMITATION OF LIABILITY

11.1 Contractor Indemnity

Contractor will defend and indemnify the Company from a third-party claim to the extent caused by Contractor's negligence, willful misconduct, breach of confidentiality, or infringement by a deliverable, subject to prompt notice and Contractor's control of the defense.

11.2 Company Indemnity

The Company will defend and indemnify Contractor from a third-party claim to the extent caused by Company materials, Company instructions that Contractor timely identified as unlawful, or the Company's negligence or willful misconduct.

11.3 Classification and Statutory Obligations

Neither Party is indemnified for wages, taxes, penalties, contributions, insurance obligations, benefits, or remedies imposed because of that Party's own direction, control, reporting failure, coverage failure, or misrepresentation. No provision shifts a statutory duty owed to a worker or government.

11.4 Liability Cap

Except for unpaid fees, fraud, willful misconduct, confidentiality or data-security breach, infringement, indemnity obligations, wage or classification liability, workers' compensation, unemployment, disability, or tax obligations, or liability that cannot lawfully be limited, each Party's aggregate liability is limited to [FEES PAID OR PAYABLE UNDER THE AFFECTED SOW / $________].

Neither Party is liable for consequential, incidental, or special damages to the extent the exclusion is enforceable, except for damages payable to a third party under a covered indemnity.

12. TERMINATION

12.1 Convenience

Either Party may terminate an SOW or this Agreement on [____] days' written notice. The Company will pay contracted compensation for completed Services and authorized noncancelable commitments by the applicable due date.

12.2 Cause

A Party may terminate for material breach not cured within [____] days after detailed written notice. No cure period is required for unlawful conduct, deliberate misuse of Confidential Information, or a breach that cannot reasonably be cured.

12.3 Effect

On termination, Contractor will stop work as directed, deliver paid work in progress, return Company property, submit a final invoice, and protect Confidential Information. Sections intended by their nature to survive will remain effective. Termination does not permit withholding compensation or remedies required by law.

13. DISPUTES

13.1 Governing Law

New Jersey law governs this Agreement, without applying rules that would select another jurisdiction's law.

13.2 Forum

An action relating to this Agreement must be filed in a state or federal court with subject-matter jurisdiction located in [COUNTY], New Jersey. Each Party consents to personal jurisdiction subject to any nonwaivable venue right, administrative process, or statutory forum.

13.3 No Predispute Arbitration or Jury Waiver

This Agreement contains no arbitration clause and no predispute jury-trial waiver. The Parties may agree to mediation, arbitration, or a lawful waiver after a dispute arises in a separate signed writing identifying the dispute and procedure.

13.4 Equitable Relief

A Party may request temporary or permanent equitable relief when available under applicable law. This provision does not eliminate any required showing, bond, defense, or remedy limitation.

14. GENERAL TERMS

1. Notices. Notices must be in writing and delivered by personal delivery, nationally recognized courier, certified mail, or confirmed email to the addresses stated above.
2. Assignment. Neither Party may assign this Agreement without written consent, except to a successor in a merger or sale of substantially all relevant assets that assumes the Agreement in writing.
3. No authority. Contractor may not incur obligations in the Company's name.
4. Entire agreement. This Agreement and signed SOWs are the complete agreement on their subject matter.
5. Amendment. An amendment must be in a writing signed by both Parties.
6. Severability. An unenforceable provision will be narrowed only to the extent permitted; the remainder continues in effect.
7. Waiver. Failure to enforce a provision is not a continuing waiver. No waiver applies to a nonwaivable statutory right.
8. Counterparts and electronic signatures. The Parties may sign counterparts and use electronic signatures.
9. Order of precedence. A signed SOW controls over this Agreement only when it identifies the provision being changed.

15. SIGNATURES

EXHIBIT A — STATEMENT OF WORK AND ABC RECORD

Company signature: [________________________________] Date: [__/__/____]

Contractor signature: [________________________________] Date: [__/__/____]

EXHIBIT B — CLASSIFICATION AND COVERAGE CHECKLIST

Complete before work begins and update if the facts change.

☐ Company documented freedom from control under the contract.

☐ Company documented freedom from control in actual performance.

☐ Services are outside the usual course of business or outside all enterprise places of business.

☐ Contractor is customarily engaged in an independently established business.

☐ Contractor's business can continue apart from this engagement.

☐ Contractor may serve others and accept or reject projects.

☐ Contractor bears meaningful business investment, expenses, and profit-or-loss opportunity.

☐ Company, Contractor, and each subcontractor documented workers' compensation coverage or a lawful basis for no coverage.

☐ The Parties separately reviewed federal and New Jersey tax classification, reporting, and withholding.

☐ Counsel calendared a review before N.J.A.C. 12:11 becomes operative on October 1, 2026.

Reviewed by Company: [________________________________] Date: [__/__/____]

Reviewed by Contractor: [________________________________] Date: [__/__/____]

SOURCES AND REFERENCES

• New Jersey Department of Labor and Workforce Development, General Misclassification Laws: https://www.nj.gov/labor/wageandhour/tools-resources/laws/generalmisclassification.shtml
• New Jersey Department of Labor and Workforce Development, Employer Workers' Compensation Requirements: https://www.nj.gov/labor/workerscompensation/employer-requirements/
• New Jersey Department of Labor and Workforce Development, May 5, 2026 ABC-regulation adoption notice: https://www.nj.gov/labor/lwdhome/press/2026/20260505_ABC.shtml
• New Jersey Register, 58 N.J.R. 1587(a), adoption of N.J.A.C. 12:11 (effective June 1, 2026; operative October 1, 2026): https://www.nj.gov/labor/assets/PDFs/Legal%20Notices/Rule%20Adoptions/58%20N.J.R.%201587_a_.pdf
• U.S. Copyright Office, Circular 30, Works Made for Hire: https://www.copyright.gov/circs/circ30.pdf
• IRS, Independent Contractor Defined: https://www.irs.gov/businesses/small-businesses-self-employed/independent-contractor-defined
• IRS, Instructions for Forms 1099-MISC and 1099-NEC: https://www.irs.gov/instructions/i1099mec

New Jersey-specific independent-contractor agreement. Legal, insurance, and tax review required before use and before October 1, 2026.