Idaho Independent Contractor Agreement Template

Introduction

Key Things to Know

1. 1

   Idaho imposes no independent contractor agreement mandate at all. No Idaho act requires the engagement to be in writing, prescribes terms the writing must contain, mandates disclosure wording, or creates a presumption that turns on what the contract says. That is a finding rather than a gap, and it changes what the document is for in Idaho: it is evidence of the arrangement and a commercial instrument, not a compliance artifact.

2. 2

   For unemployment insurance the starting point is coverage. Idaho Code 72-1316(4) provides that services performed by an individual for remuneration are covered employment unless it is shown that the worker has been and will continue to be free from control or direction in the performance of the work, both under the contract of service and in fact, and that the worker is engaged in an independently established trade, occupation, profession, or business. Both parts must be shown and the putative employer bears the burden.

3. 3

   The Idaho Supreme Court has been blunt about how little the label achieves. In Excell Construction, Inc. v. State Department of Labor, 141 Idaho 688, 116 P.3d 18 (2005), the court described covered employment as an expansive term that sweeps within its purview employees and independent contractor alike, and held that the status of independent contractor is not enough to avoid coverage. The court also required that freedom from direction and control exist in theory, under a contract of service, and in fact, and that the putative employer demonstrate that it lacked a right to control the worker.

4. 4

   There is a filing duty attached to treating someone as a contractor. Idaho Code 72-1316(7) provides that an employer claiming that services performed for it, or remuneration it paid, do not constitute covered employment or covered wages shall make a report to the department of all pertinent facts on which the claim is based, signed by the employer or an authorized representative. It is an affirmative, signed statement of facts to the Department of Labor, and it is a separate obligation from anything in the contract.

5. 5

   Workers' compensation asks about control of the result rather than the means. Idaho Code 72-102(16) defines an independent contractor as a person who renders service for a specified recompense for a specified result, under the right to control or actual control of the principal as to the result of the work only and not as to the means by which the result is accomplished, and adds that a custom farmer is considered an independent contractor for that act. The current numbering matters, because Idaho Supreme Court opinions from 2007 and 2020 cite the same definition as subsection (17) under the previous arrangement.

6. 6

   Idaho case law resolves close workers' compensation calls toward coverage. In Hernandez v. Triple Ell Transport, Inc., 145 Idaho 37, 175 P.3d 199 (2007), the court asked whether the contract gives, or the employer assumes, the right to control the time, manner, and method of executing the work, as distinguished from the right merely to require certain definite results, and weighed four factors: direct evidence of the right, the method of payment, the furnishing of major items of equipment, and the right to terminate the relationship at will and without liability. No factor controls, and where a doubt exists the Act must be given a liberal construction in favor of finding the relationship.

7. 7

   Wage claims are decided on a third footing. Idaho Code 44-1503 defines employ as to suffer or permit to work and employee as any individual employed by an employer, and the Minimum Wage Law contains no independent contractor test. The filters are the status exceptions in Idaho Code 44-1504, covering bona fide executive, administrative, or professional employees, domestic service, outside salesmen, seasonal nonprofit camp staff, certain minors and family employment, and certain agricultural labor. Idaho Code 44-1502 sets the rate at seven dollars and twenty-five cents an hour, tracks the federal rate, and bars any political subdivision from setting a higher one.

Idaho Requirements for Independent Contractor Agreement

• Idaho Two-Part Unemployment Test With Coverage Presumed (Idaho Code 72-1316(4))

  Services performed by an individual for remuneration are covered employment for purposes of the employment security law unless it is shown that the worker has been and will continue to be free from control or direction in the performance of the work, both under the contract of service and in fact, and that the worker is engaged in an independently established trade, occupation, profession, or business. There is no third requirement about the usual course of business, and the putative employer bears the burden on both parts.

• Idaho Contractor Status Alone Does Not Avoid Coverage (Excell Construction, Inc. v. State Department of Labor, 141 Idaho 688 (2005))

  The Idaho Supreme Court held that covered employment is an expansive term that sweeps within its purview employees and independent contractor alike, so the status of independent contractor is not enough to avoid coverage. To merit an exemption the putative employer must demonstrate freedom from direction and control existing in theory, under a contract of service, and in fact, and must show that it lacked a right to control the worker.

• Idaho Signed Report of Pertinent Facts to the Department of Labor (Idaho Code 72-1316(7))

  Any employer claiming that services performed for the employer, or remuneration paid by the employer, do not constitute covered employment or covered wages shall make a report to the department of all pertinent facts on which the claim is based, and the report must be signed by the employer or an authorized representative. This is an affirmative filing obligation attached to treating a worker as outside coverage, and it is distinct from any contract term.

• Idaho Workers' Compensation Definition of Independent Contractor (Idaho Code 72-102(16))

  An independent contractor means any person who renders service for a specified recompense for a specified result, under the right to control or actual control of the principal as to the result of the work only and not as to the means by which the result is accomplished, and a custom farmer is considered an independent contractor for workers' compensation purposes. Employee is defined at Idaho Code 72-102(11) and employer at 72-102(12)(a).

• Idaho Four-Factor Right-to-Control Analysis (Hernandez v. Triple Ell Transport, Inc., 145 Idaho 37 (2007))

  The test is whether the contract gives, or the employer assumes, the right to control the time, manner, and method of executing the work, as distinguished from the right merely to require certain definite results. Four factors are traditionally used to determine whether a right to control exists: direct evidence of the right, the method of payment, the furnishing of major items of equipment, and the right to terminate the relationship at will and without liability. No single factor is controlling.

• Idaho Resolves Doubt in Favor of Finding an Employment Relationship (Hernandez v. Triple Ell Transport, Inc., 145 Idaho 37 (2007))

  Where a doubt exists as to whether an individual is an employee or an independent contractor under the workers' compensation act, the act must be given a liberal construction in favor of finding the relationship. Status is a question of fact decided case by case from full consideration of the facts and circumstances, with the Industrial Commission acting as the arbiter of conflicting evidence.

• Idaho Cites the Independent Contractor Definition Under Current Numbering (Idaho Code 72-102)

  Idaho Code 72-102 has been renumbered. The independent contractor definition is now subsection (16) and employee is subsection (11), while Idaho Supreme Court opinions from 2007 and 2020 cite them as (17) and (12) respectively. Secondary material still using the older numbers is reproducing a superseded arrangement, which is a useful signal when checking a form or an article against the statute.

• Idaho Exempt Employments and Coverage Elections Are Filings (Idaho Code 72-212 and 72-213)

  Idaho Code 72-212 lists employments exempt from workers' compensation, including sole proprietors, working partners and limited liability company members, and certain shareholder officers. Bringing an exempt employment within coverage requires an election filed under Idaho Code 72-213. Neither the exemption nor the election is created or changed by an independent contractor agreement.

• Idaho Minimum Wage Law Has No Classification Test (Idaho Code 44-1502, 44-1503, and 44-1504)

  Idaho Code 44-1503 defines employ to include to suffer or permit to work and employee as any individual employed by an employer, with no ABC test, no control test, and no reference to independent contractors. The operative filters are the status exceptions in Idaho Code 44-1504. Idaho Code 44-1502 sets the minimum wage at seven dollars and twenty-five cents per hour, requires it to conform to and track the federal minimum wage, and bars any political subdivision from establishing a higher one.