Georgia Independent Contractor Agreement Template
Two Georgia agencies take opposite official positions on the same piece of paper, so the document has to be drafted knowing which one is asking.
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Introduction
An Independent Contractor Agreement is a contract between a business and a self-employed worker covering scope, payment, ownership of the work product, and how the engagement ends. Classification is decided by a legal test rather than by what the document is called, and in Georgia the test depends on which agency is asking. That produces an unusual split. For workers' compensation, the definition of employee in O.C.G.A. 34-9-1(2) treats a person as an independent contractor rather than an employee only where that person has a written contract as an independent contractor and otherwise qualifies, so the writing is part of the status itself. For unemployment insurance, the Georgia Department of Labor tells employers the opposite in its Employer Handbook: independent contractors are not independent just because that is what their employer calls them, because that is what they call themselves, or because they sign an independent contractor agreement. The unemployment question is answered instead by the statutory test in O.C.G.A. 34-8-35(f), which starts from a presumption of employment. One document, two official positions. The right response is to sign the agreement, because workers' compensation status can depend on it, while treating the unemployment analysis as something the facts have to satisfy on their own.
Key Things to Know
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Georgia unemployment law starts from employment and works backwards. Services performed by an individual for wages are considered employment subject to unemployment insurance taxes unless and until it is shown that a statutory exemption applies, which puts the burden on the employing unit. The Department of Labor states the rule plainly: a worker not meeting the statutory tests required for independent contractor exemption as found in O.C.G.A. 34-8-35(f) is considered to be an employee.
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There are two independent ways to satisfy O.C.G.A. 34-8-35(f), and only one has to be met. The first is a two-part showing that the individual has been and will continue to be free from control or direction over the performance of the services, both under the contract of service and in fact, and that the individual is customarily engaged in an independently established trade, occupation, profession, or business. The second is entirely different: an IRS determination on Form SS-8, Determination of Worker Status for Purposes of Federal Employment Taxes and Income Tax Withholding, deciding against employee status.
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Freedom from control is not left to argument. The statute demonstrates it through seven indicia: the individual is not prohibited from working for other companies or holding other employment at the same time; is free to accept or reject work assignments without consequence; is not prescribed minimum hours or, in sales, a minimum number of orders; has discretion to set his or her own work schedule; receives only minimal instructions and no direct oversight or supervision beyond the location of the work and requested deadlines; has no territorial or geographic restrictions where applicable; and is not required to perform or behave in a manner the Commissioner determines to demonstrate employment.
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Georgia's unemployment test has no middle prong. There is no requirement that the service fall outside the usual course of the hiring business, which is the prong that defeats most classifications in states running a full three-part test. A Georgia business can engage a genuinely independent worker to do work that sits squarely inside its own line of business and still clear the statutory test, provided control and independent-trade status hold up.
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The Department of Labor's warning about the document is worth reading before relying on one. Independent contractors are not independent just because that is what their employer calls them, because that is what they call themselves, or because they sign an independent contractor agreement. For unemployment purposes the agreement is evidence of what the parties intended, not a substitute for the statutory showing.
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Workers' compensation moves in the opposite direction on the same document. Under O.C.G.A. 34-9-1(2), employee reaches every person in the service of another under any contract of hire or apprenticeship, written or implied, and the independent contractor carve-out in that same paragraph begins with the person having a written contract as an independent contractor. The paragraph also treats an owner-operator as defined in O.C.G.A. 40-2-87 as an independent contractor, and provides that individuals who are parties to a franchise agreement under the Federal Trade Commission franchise disclosure rule are not deemed employees.
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A corporate officer who wants out of workers' compensation coverage does it by filing, not by contract. O.C.G.A. 34-9-1(2) allows any officer of a corporation to elect exemption by filing written certification of the election with the insurer or, where there is no insurer, with the State Board of Workers' Compensation as provided in O.C.G.A. 34-9-2.1. That is a separate step from signing an independent contractor agreement and neither one accomplishes the other.
Key decisions before you file
Before you file a Independent Contractor Agreement in Georgia, a few decisions shape the document: which option to choose and what each one means. The Independent Contractor Agreement guide walks through them.
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Georgia Requirements for Independent Contractor Agreement
The workers' compensation definition of employee reaches every person in the service of another under any contract of hire or apprenticeship, written or implied. The independent contractor carve-out within the same paragraph is available to a person who has a written contract as an independent contractor and who buys and resells a product for no other compensation, provides an agricultural service, or otherwise qualifies as an independent contractor. The absence of the written contract removes the starting point for the carve-out.
Services performed by an individual for wages are deemed employment subject to the chapter unless and until the statutory exemption is shown, so the employing unit carries the burden. The Department of Labor states the rule in its Employer Handbook: a worker not meeting the statutory tests required for independent contractor exemption as found in O.C.G.A. 34-8-35(f) is considered to be an employee.
The first route to the exemption requires both that the individual has been and will continue to be free from control or direction over the performance of the services, both under the contract of service and in fact, and that the individual is customarily engaged in an independently established trade, occupation, profession, or business. Both parts must hold, and the control part is measured by conduct as well as by the contract.
Freedom from control is demonstrated by whether the individual is not prohibited from working for other companies or holding other employment at the same time, is free to accept or reject work assignments without consequence, is not prescribed minimum hours or a minimum number of sales orders, has discretion to set his or her own work schedule, receives only minimal instructions and no direct oversight or supervision beyond location and requested deadlines, has no territorial or geographic restrictions where applicable, and is not required to act in a manner the Commissioner determines to demonstrate employment.
The exemption is also available where the individual and the services performed for wages are the subject of an SS-8 determination by the Internal Revenue Service that decided against employee status. The Department of Labor's Employer Handbook confirms that only one of the alternative tests must be satisfied to establish the exemption from unemployment taxes, so an SS-8 determination stands on its own without a separate showing on control.
The Georgia unemployment test contains no requirement that the service be performed outside the usual course of the hiring business or away from its premises. Businesses used to the three-part formulation should note the omission, because work that would fail elsewhere for being central to the hiring party's operations can still qualify in Georgia if control and independent-trade status are established.
An officer of a corporation may elect to be exempt from workers' compensation coverage by filing written certification of the election with the insurer or, where there is no insurer, with the State Board of Workers' Compensation. This is a filing obligation separate from any independent contractor agreement, and executing a contract does not make the election.
For workers' compensation, an owner-operator as defined in O.C.G.A. 40-2-87 is deemed to be an independent contractor, and individuals who are parties to a franchise agreement as set out by the Federal Trade Commission franchise disclosure rule at 16 C.F.R. 436.1 through 436.11 are not deemed employees for that chapter. These are narrow statutory categories rather than a general route to contractor status.
The Georgia Minimum Wage Law names itself, assigns administration to the Commissioner of Labor, sets a state rate of $5.15 per hour, and lists exempt employers and workers. It defines no classification test and does not apply to an employer subject to a federal act providing a higher minimum wage. Because the federal rate is higher, pay claims in Georgia are decided under the federal standard rather than under a state contractor test.
Frequently Asked Questions
Georgia's two main agencies take opposite official positions on it. The workers' compensation definition of employee in O.C.G.A. 34-9-1(2) makes a written independent contractor contract part of the carve-out from employee status, so the paper matters there. The Department of Labor's Employer Handbook tells employers the same paper decides nothing for unemployment insurance. The practical answer is to have the agreement, because one act relies on it, and to build the engagement so the unemployment test is satisfied on the facts.
Not for unemployment insurance. The Department of Labor states that independent contractors are not independent just because that is what their employer calls them, because that is what they call themselves, or because they sign an independent contractor agreement. Services performed for wages are considered employment subject to unemployment taxes unless and until the statutory exemption in O.C.G.A. 34-8-35(f) is shown, which is a question about how the work is actually performed.
O.C.G.A. 34-8-35(f) offers two routes and only one has to be satisfied. The first requires both that the individual is and will continue to be free from control or direction over the performance of the services, under the contract of service and in fact, and that the individual is customarily engaged in an independently established trade, occupation, profession, or business. The second is an IRS Form SS-8 determination that decided against employee status.
Not the full version. Georgia's control prong and independent-business prong resemble the A and C parts of an ABC test, but the statute has no prong asking whether the service is performed outside the usual course of the hiring business. That missing prong is the one that defeats most classifications in states that use all three, so the Georgia test is materially easier for a business whose contractor does work related to its own line of business.
It is a standalone statutory alternative rather than supporting evidence. Where the individual and the services performed for wages are the subject of an SS-8 determination by the IRS that decided against employee status, the exemption in O.C.G.A. 34-8-35(f) is available on that basis alone, without separately proving freedom from control and independent-trade status. A request that has been filed but not decided does not have that effect.
It depends on which law is in view. The workers' compensation definition of employee in O.C.G.A. 34-9-1(2) conditions independent contractor status on the person having a written contract as an independent contractor, so for that act the writing is part of the status. Nothing in the unemployment statute requires a written agreement, and nothing in the state minimum wage chapter does either. Because the workers' compensation exposure is usually the larger one, having the writing is the safer course.
The employing unit. Services performed by an individual for wages are deemed employment subject to the chapter unless and until it is shown that the statutory exemption applies, so the business is the party that has to establish the exemption. Contemporaneous records showing that the worker set their own schedule, worked for others, and received only minimal instruction are more useful for that purpose than the recitals in the contract.
A few are, for workers' compensation purposes. O.C.G.A. 34-9-1(2) provides that an owner-operator as defined in O.C.G.A. 40-2-87 is deemed an independent contractor, and that individuals who are parties to a franchise agreement as set out by the Federal Trade Commission franchise disclosure rule at 16 C.F.R. 436.1 through 436.11 are not deemed employees for that chapter. Those categories are specific and do not extend to contractors generally.
Yes, but by filing rather than by contract. Under O.C.G.A. 34-9-1(2), any officer of a corporation may elect to be exempt from coverage by filing written certification of the election with the insurer or, where there is no insurer, with the State Board of Workers' Compensation as provided in O.C.G.A. 34-9-2.1. An independent contractor agreement does not make that election, and the election does not answer the classification question for anyone else.
In practice, no. The Georgia Minimum Wage Law sets a state rate of $5.15 per hour, exempts a long list of employers and workers, and does not apply to an employer subject to a federal act providing a higher minimum wage. Since the federal rate is higher, nearly every Georgia engagement is resolved under the federal standard, and the state chapter supplies no classification test that a contract could be drafted against.