Not all self employed contractor agreements are the same, which means there isn’t one right way to write one. However, it is possible to create an agreement that clearly defines the rights and responsibilities of both parties involved and encourages open communication between them. The agreement must be written in such a way that it protects you and your business while offering your contractors an attractive deal they can’t refuse. Here are essential clauses every self employed contractor agreement should include.
Pricing terms
The pricing terms of a contract should always be as clear and explicit as possible. Setting the right price can help you to attract the right people who are looking for a job, while also ensuring that they’re getting what they pay for. Try to provide an estimate upfront so you both know where things stand before they start, or try using milestones and feedback as part of the payment process. It may take some trial-and-error in order to find the best system for your business, but it’s worth it in order to have clarity from day one.
When payment is due
Payments are due on the 20th of each month, and overdue invoices will be subject to a 1.5% late payment fee. If an invoice remains unpaid three months after the due date, or if the client does not pay in advance for more than six months, it may be canceled without notice. The Company reserves the right to withhold payment pending resolution of any disputes with you relating to work completed by you on behalf of The Company.
Form of payment
The most common way of paying a freelancer is by sending a bank transfer. This may be easier if you are working with someone in another country, and it is generally cheaper than paying via PayPal. However, there may be times when you prefer to use another method of payment. If so, make sure that it is specified in writing within your freelance contract. One other option is to pay the freelancer after they have completed the work (in this case you would need an escrow service). Another alternative is to pay them before they have completed the work.
Payment schedule
A payment schedule is an important component of any contract, but it’s especially crucial in the construction industry. If you’re a business owner or project manager, you should have a clear understanding of how much money your employees will be receiving throughout the course of their employment.
Cancellation and extension
If you are cancelling, be sure to do so more than a month in advance. If you need to cancel on short notice and the other party cannot accommodate it then they may not owe any compensation. However, if they can make alternative arrangements then you may have to pay a cancellation fee. Make sure that this is what you want to do before agreeing because there is no turning back once the cancellation has been made.
Conclusion
Do you need an employment contract? An employment contract is a legally binding document which sets out what both you and your new employee are obliged to do and can be useful in avoiding disputes. The Labour Code applies only to employees, so those working as self-employed contractors will have no protection against unfair dismissal and may be able to claim fewer benefits.