Independent Contractor Agreement - New Mexico

NEW MEXICO INDEPENDENT CONTRACTOR SERVICES AGREEMENT

CLASSIFICATION WARNING: This Agreement documents facts; it does not create independent-contractor status. Apply the test for each law separately and confirm that actual practice matches the signed terms.

Table of Contents

1. Parties
2. Recitals
3. Scope of Services
4. Term and Termination
5. Compensation and Payment
6. New Mexico Classification Review
7. Tax Obligations
8. Benefits and Statutory Rights
9. Insurance
10. Intellectual Property
11. Confidentiality
12. No Restrictive Covenant
13. Indemnification
14. Dispute Resolution
15. New Mexico-Specific Notices
16. General Provisions
17. Signatures

1. PARTIES

This Independent Contractor Agreement ("Agreement") is entered into as of [__/__/____] ("Effective Date") by and between:

Company/Client:
Name: [________________________________]
Address: [________________________________]
City: [________________________________] State: New Mexico ZIP: [____]
EIN/Tax ID: [________________________________]
NM CRS ID: [________________________________]

Independent Contractor:
Name: [________________________________]
DBA (if applicable): [________________________________]
Address: [________________________________]
City: [________________________________] State: [____] ZIP: [____]
SSN/EIN: [________________________________]
NM CRS ID (if applicable): [________________________________]

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

2. RECITALS

WHEREAS, Company desires to engage Contractor to perform certain services; and

WHEREAS, Contractor represents that Contractor is engaged in an independently established trade, occupation, profession, or business;

NOW, THEREFORE, in consideration of the mutual covenants herein, the Parties agree as follows:

3. SCOPE OF SERVICES

3.1. Contractor shall perform the following services ("Services"):
[________________________________]

3.2. Deliverables: [________________________________]

3.3. Objective acceptance criteria: [________________________________]

3.4. Contractor controls the ordinary manner, method, sequence, staffing, schedule, and means of performing the Services. Company may specify the contracted result, lawful requirements, worksite and security rules, and requested deadlines.

3.5. The Parties shall complete Exhibit A before work begins and update it whenever the facts change.

4. TERM AND TERMINATION

4.1. Term. This Agreement begins on [__/__/____] and continues through [__/__/____].

4.2. Termination for Convenience. Either Party may terminate upon [____] days' written notice.

4.3. Termination for Cause. Either Party may terminate immediately upon material breach if not cured within [____] days.

4.4. Effect of Termination. Contractor shall stop work as directed, deliver paid work and authorized work in progress, return Company property, and submit a final invoice. Company shall pay compensation earned and approved noncancelable commitments by the applicable due date. Termination does not waive any nonwaivable right or obligation.

5. COMPENSATION AND PAYMENT

5.1. Compensation.

☐ Fixed fee of $[________________________________]
☐ Hourly rate of $[________________________________] per hour
☐ Milestone-based payments per Exhibit A
☐ Other: [________________________________]

5.2. Invoicing. Contractor shall submit invoices [________________________________].

5.3. Payment Terms. Payment due within [____] days of valid invoice.

5.4. Expenses. Contractor bears all expenses unless pre-approved. Pre-approved: [________________________________]

5.5. Gross Receipts Tax. The New Mexico Taxation and Revenue Department states that pay received by independent contractors is subject to gross receipts tax unless a statutory exemption or deduction applies to the transaction. The Parties shall identify the applicable reporting location, rate, exemption, deduction, and any nontaxable transaction certificate before invoicing.

6. NEW MEXICO CLASSIFICATION REVIEW

6.1. Separate Legal Tests. Classification may differ among unemployment insurance, workers' compensation, wage-and-hour, and tax laws. A conclusion under one test does not decide another. Nothing in this Agreement creates an agency, partnership, or joint venture.

6.2. Unemployment ABC Test. The New Mexico Department of Workforce Solutions identifies NMSA 1978, § 51-1-42(F)(5) as the unemployment-insurance test. Services for payment are employment unless all three elements are established by a preponderance of the evidence:

Prong A — Freedom from Control:
☐ Contractor has been and will continue to be free from control or direction over performance, both under the contract and in fact.

Prong B — Outside Usual Course:
☐ Services are outside the usual course of Company's business; or

☐ Services are performed outside all places of business of the enterprise.

Prong C — Independent Business:
☐ Contractor is customarily engaged in an independently established trade, occupation, profession, or business of the same nature as the Services.

6.3. ABC Evidence. The Parties shall preserve evidence of actual practice, including:

• the Company's usual course and every place of business relevant to the Services;
• Contractor's discretion over methods, sequence, staffing, and time;
• Contractor's other clients, public marketing, recurring business liabilities, and investment;
• Contractor's tools, facilities, licenses, insurance, and opportunity for profit or loss; and
• facts showing Contractor's business can continue apart from this engagement.

6.4. Unemployment Records. Under 11.3.400.401(A)(2)(b) NMAC, an employing unit must keep records verifying that workers are properly classified, including the general ledger or check register. The rule requires the prescribed records to be retained for at least four years in addition to the current calendar year.

6.5. Workers' Compensation — Fact-Specific Status. The Workers' Compensation Administration states that there is no bright-line test. Status depends on the working relationship and the right to control the details, means, or methods of performance. Calling a worker an independent contractor, signing this Agreement, or issuing Form 1099 does not conclusively determine coverage.

Relevant facts include:

☐ who has the right to control the details and methods of work;

☐ whether Company controls only the contracted result;

☐ method of payment;

☐ who furnishes equipment, tools, and facilities;

☐ the right to hire, direct, and discharge personnel;

☐ the skill and separate-business character of the work; and

☐ the relationship between the Services and Company's regular business.

6.6. Coverage and Statutory-Employer Review. The Workers' Compensation Administration states that employers of three or more workers generally must carry coverage, and businesses engaged in activities required to be licensed under the Construction Industries Licensing Act must carry coverage regardless of worker count. NMSA 1978, § 52-1-22 separately addresses work procured through a contractor other than an independent contractor when the work is part of the employer's trade, business, or undertaking. Before work begins, the Parties shall obtain a written coverage analysis for Company, Contractor, and every subcontractor.

6.7. Reclassification. If an agency or court determines that Contractor or any individual performing Services is an employee for a particular law, the Parties shall comply with that determination. Nothing here waives wages, taxes, contributions, insurance, benefits, penalties, or remedies that cannot lawfully be waived.

7. TAX OBLIGATIONS

7.1. Contractor is responsible for taxes and filings imposed on Contractor's business and personnel.

7.2. Company may report payments and withhold amounts when required by then-current federal or New Mexico law.

7.3. Company shall issue Form 1099-NEC or another information return when required by current federal law and IRS instructions.

7.4. Contractor shall provide a properly completed Form W-9 or applicable alternative before first payment. Tax reporting and withholding do not determine worker status.

8. BENEFITS AND STATUTORY RIGHTS

8.1. Company does not promise Contractor participation in an employee benefit plan unless the governing plan, another signed writing, or applicable law provides otherwise.

8.2. This section does not determine status or waive any benefit, wage, workers' compensation, unemployment, tax, or other right arising under law.

9. INSURANCE

9.1. Contractor shall maintain at Contractor's expense:

☐ General liability insurance: $[________________________________] minimum
☐ Professional liability insurance: $[________________________________] minimum
☐ Workers' compensation insurance or documented coverage analysis
☐ Commercial auto insurance (if applicable)

9.2. Contractor shall provide certificates, endorsements, or a written coverage analysis before work begins and upon renewal. Insurance does not determine classification.

10. INTELLECTUAL PROPERTY

10.1. Background Materials. Each Party retains ownership of materials developed independently of this Agreement and identified in Exhibit A.

10.2. 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 that it is a work made for hire for Company. As a separate fallback, upon full payment Contractor assigns all transferable right, title, and interest in the deliverable, excluding identified background and third-party materials.

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

10.4. Third-Party Materials. Contractor shall identify third-party materials and license terms before delivery.

11. CONFIDENTIALITY

11.1. Definition. "Confidential Information" means all non-public information disclosed by Company.

11.2. Obligations. Maintain strict confidence, no disclosure without consent, use solely for Services.

11.3. Exceptions. Publicly available, previously known, independently developed, or legally required.

11.4. Duration. These duties survive for [____] years after disclosure. Information qualifying as a trade secret remains protected for as long as applicable law protects it.

12. NO RESTRICTIVE COVENANT

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

13. INDEMNIFICATION

13.1. Contractor shall defend and indemnify Company from a third-party claim to the extent caused by Contractor's negligence, willful misconduct, breach of confidentiality, or infringement by a deliverable.

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

13.3. 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.

13.4. Except for unpaid fees, fraud, willful misconduct, confidentiality or data-security breach, infringement, indemnity obligations, wage or classification liability, workers' compensation, unemployment, 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 / $________].

14. DISPUTE RESOLUTION

14.1. Governing Law. Governed by New Mexico law.

14.2. Mediation. Parties shall first attempt mediation in [________________________________] County, New Mexico.

14.3. Forum. An action relating to this Agreement must be filed in a state or federal court with subject-matter jurisdiction located in [________________________________] County, New Mexico, subject to any nonwaivable venue right, administrative process, or statutory forum.

14.4. No Predispute Arbitration or Jury Waiver. This Agreement contains no arbitration clause and no predispute jury-trial waiver. The Parties may agree to a procedure after a dispute arises in a separate signed writing identifying the dispute.

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

15. NEW MEXICO-SPECIFIC NOTICES

15.1. Separate Tests. New Mexico uses the ABC test in NMSA 1978, § 51-1-42(F)(5) for unemployment insurance. Workers' compensation status and coverage require a separate analysis under the Workers' Compensation Act and current WCA guidance.

15.2. Evidence Standard. The unemployment exception requires every ABC element to be established by a preponderance of the evidence. The Parties shall preserve records of actual practice, not merely contractual labels.

15.3. Nonwaivable Consequences. A classification error may create contributions, taxes, insurance duties, wages, benefits, interest, penalties, and other remedies under the particular law. This Agreement does not waive or transfer those duties.

15.4. Gross Receipts Tax. New Mexico generally subjects independent-contractor receipts to gross receipts tax unless an exemption or deduction applies. Rates and reporting locations vary. The Parties shall use current Taxation and Revenue Department guidance.

15.5. Construction Coverage. A business engaged in activities required to be licensed under the Construction Industries Licensing Act must confirm workers' compensation coverage regardless of worker count.

16. GENERAL PROVISIONS

16.1. Entire Agreement. Complete agreement superseding all prior discussions.

16.2. Amendments. Written and signed by both Parties.

16.3. Severability. Invalid provisions severed.

16.4. Notices. Written to addresses above.

16.5. Assignment. Not assignable without consent.

16.6. Waiver. No waiver constitutes future waiver.

16.7. Counterparts. Executable in counterparts.

17. SIGNATURES

IN WITNESS WHEREOF, the Parties execute this Agreement as of the Effective Date.

COMPANY/CLIENT:

Signature: [________________________________]
Printed Name: [________________________________]
Title: [________________________________]
Date: [__/__/____]

INDEPENDENT CONTRACTOR:

Signature: [________________________________]
Printed Name: [________________________________]
Title/DBA: [________________________________]
Date: [__/__/____]

EXHIBIT A — STATEMENT OF WORK

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

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

EXHIBIT B — CLASSIFICATION AND COVERAGE CHECKLIST

☐ Each unemployment ABC element is documented under contract and in fact.

☐ Company retains classification records required by 11.3.400.401 NMAC.

☐ Contractor's same-nature independent business can continue apart from Company.

☐ Company, Contractor, and each subcontractor completed a workers' compensation coverage analysis.

☐ Construction licensing and coverage requirements were reviewed, if applicable.

☐ Federal and New Mexico tax classification, information reporting, withholding, and gross receipts tax were separately reviewed.

Sources and References:

• New Mexico Compilation Commission, current NMSA 1978 scope and Chapter 51: https://www.nmcompcomm.us/scope-of-coverage-2/ and https://nmonesource.com/nmos/nmsa/en/4425/1/document.do
• New Mexico Compilation Commission, current NMSA 1978 Chapter 52: https://nmonesource.com/nmos/nmsa/en/4394/1/document.do
• New Mexico Department of Workforce Solutions, Misclassification and the ABC Test: https://www.dws.state.nm.us/en-us/Misclassification
• New Mexico State Records Center and Archives, 11.3.400 NMAC: https://www.srca.nm.gov/parts/title11/11.003.0400.html
• New Mexico Workers' Compensation Administration, Frequently Asked Questions: https://www.workerscomp.nm.gov/faqs/
• New Mexico Taxation and Revenue Department, Independent Contractors vs. Employees: https://www.tax.newmexico.gov/individuals/personal-income-tax-information-overview/independent-contractors-vs-employees/
• New Mexico Taxation and Revenue Department, Gross Receipts Tax Overview: https://www.tax.newmexico.gov/businesses/gross-receipts-overview/
• 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