Independent Contractor Agreement
INDEPENDENT CONTRACTOR AGREEMENT
State of Vermont
Table of Contents
- Parties
- Recitals
- Scope of Services
- Term and Termination
- Compensation and Payment
- Independent Contractor Status
- Tax Obligations
- No Employee Benefits
- Insurance
- Intellectual Property
- Confidentiality
- Non-Competition and Non-Solicitation
- Indemnification
- Dispute Resolution
- Vermont-Specific Notices
- General Provisions
- Signatures
1. PARTIES
This Independent Contractor Agreement ("Agreement") is entered into as of [__/__/____] ("Effective Date") by and between:
Company/Client:
Name: [________________________________]
Address: [________________________________]
City: [________________________________] State: Vermont ZIP: [____]
EIN/Tax ID: [________________________________]
Independent Contractor:
Name: [________________________________]
DBA (if applicable): [________________________________]
Address: [________________________________]
City: [________________________________] State: [____] ZIP: [____]
SSN/EIN: [________________________________]
2. RECITALS
WHEREAS, Company desires to engage Contractor to perform certain services; and
WHEREAS, Contractor represents that Contractor is customarily 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. Contractor shall determine the manner, method, and means of performing the Services.
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 delivers completed work and is paid through termination date.
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: [________________________________]
6. INDEPENDENT CONTRACTOR STATUS
6.1. Classification. Contractor is an independent contractor. No employment, agency, joint venture, or partnership is created.
6.2. Vermont ABC Test (Unemployment). Under 21 V.S.A. § 1301, services are employment unless ALL three prongs are satisfied:
Prong A — Freedom from Control:
☐ Contractor is free from control and direction in performing Services, both under this Agreement and in fact
Prong B — Outside Usual Course of Business:
☐ Services are performed outside the usual course of Company's business; OR
☐ Services are performed outside all of Company's places of business
Prong C — Independently Established Trade:
☐ Contractor is customarily engaged in an independently established trade, occupation, profession, or business
6.3. Right-to-Control Test (Workers' Compensation). For workers' compensation under 21 V.S.A. § 601 et seq., factors include:
☐ Contractor controls the manner and means of performance
☐ Contractor provides own tools and equipment
☐ Contractor has right to hire assistants
☐ Contractor has opportunity for profit or loss
☐ Contractor sets own schedule
☐ The work is not integral to Company's regular business
☐ Contractor has significant business investment
6.4. Additional Indicators:
☐ Contractor maintains own business entity and licenses
☐ Contractor serves multiple clients
☐ Contractor has own business location
☐ Contractor maintains own business insurance
6.5. Burden of Proof. Vermont law presumes workers are employees. The burden is on the employer to prove IC status.
7. TAX OBLIGATIONS
7.1. Contractor is solely responsible for all federal, state, and local taxes, including Vermont state income tax and self-employment tax.
7.2. Company shall not withhold taxes.
7.3. Company shall issue Form 1099-NEC for payments of $600 or more.
7.4. Contractor shall provide a W-9 prior to first payment.
8. NO EMPLOYEE BENEFITS
8.1. Contractor is not entitled to employee benefits, including health insurance, retirement, paid leave, workers' compensation, or unemployment insurance.
8.2. Contractor is responsible for personal coverage.
9. INSURANCE
9.1. Contractor shall maintain at Contractor's expense:
☐ General liability insurance: $[________________________________] minimum
☐ Professional liability insurance: $[________________________________] minimum
☐ Workers' compensation insurance (if Contractor has employees)
☐ Commercial auto insurance (if applicable)
9.2. Certificates of insurance upon request.
10. INTELLECTUAL PROPERTY
10.1. Work Product.
☐ Owned by Company as work made for hire with full assignment
☐ Licensed to Company per: [________________________________]
☐ Owned by Contractor with perpetual non-exclusive license to Company
10.2. Pre-Existing IP. Contractor retains rights; grants non-exclusive license.
10.3. Assignment. Contractor assigns all rights not qualifying as work made for hire.
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. Survives for [____] years. Trade secrets protected under the Vermont Uniform Trade Secrets Act (9 V.S.A. § 4601 et seq.).
12. NON-COMPETITION AND NON-SOLICITATION
12.1. Non-Competition. During the term and for [____] months after termination, Contractor shall not engage in competing activities within [________________________________].
12.2. Non-Solicitation. During the term and for [____] months after termination, Contractor shall not solicit Company's clients or employees.
12.3. Reasonableness. Restrictions are reasonable and necessary to protect legitimate business interests.
13. INDEMNIFICATION
13.1. Contractor shall indemnify, defend, and hold harmless Company from claims arising from: (a) performance; (b) breach; (c) negligence or misconduct; (d) claims of employment status.
13.2. Company shall indemnify Contractor from Company's negligence or misconduct.
14. DISPUTE RESOLUTION
14.1. Governing Law. Governed by Vermont law.
14.2. Mediation. Parties shall first attempt mediation in [________________________________] County, Vermont.
14.3. Arbitration / Litigation.
☐ Binding arbitration under AAA rules in [________________________________], Vermont.
☐ Jurisdiction in [________________________________] County Superior Court, Vermont.
14.4. Attorneys' Fees. Prevailing party entitled to reasonable fees and costs.
15. VERMONT-SPECIFIC NOTICES
15.1. Multiple Classification Tests. Vermont applies different tests depending on the legal context: the ABC test for unemployment insurance (21 V.S.A. § 1301), the right-to-control test for workers' compensation (21 V.S.A. § 601), and potentially the nature-of-the-business test in other contexts. All tests create a presumption of employment.
15.2. ABC Test — Prong B. The "outside the usual course of business" prong (B) is frequently the most difficult to satisfy. If the contractor's work is integral to the company's core business, IC classification will likely fail under the ABC test.
15.3. Misclassification Penalties. Employers who misclassify workers face: (a) liability for unpaid unemployment insurance contributions plus interest and penalties; (b) workers' compensation liability; (c) back wages and wage payment act violations; (d) potential penalties assessed by the Vermont Department of Labor.
15.4. Vermont Department of Labor. The VT DOL has authority to investigate classification and conduct audits. Workers may file complaints directly with the Department.
15.5. Workers' Compensation. Independent contractors are excluded from Vermont workers' compensation (21 V.S.A. § 601 et seq.). However, the right-to-control test applies — misclassification exposes the company to direct liability for workplace injuries.
15.6. Employee Protections. Vermont has robust employee protections including paid sick leave (21 V.S.A. § 481 et seq.) and parental leave that apply only to employees. Proper classification is essential to determine applicability.
16. GENERAL PROVISIONS
16.1. Entire Agreement. Complete agreement.
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
[________________________________]
Sources and References:
About This Template
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.
Important Notice
This template is provided for informational purposes. It is not legal advice. We recommend having an attorney review any legal document before signing, especially for high-value or complex matters.
Last updated: April 2026