Idaho Independent Contractor Agreement Template
Idaho's unemployment statute is indifferent to the label, so the writing that actually matters there is a signed report to the state, not the contract.
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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 the name on the document, and Idaho applies a different one under each of its main acts. For unemployment insurance, Idaho Code 72-1316(4) treats services performed for remuneration as covered employment unless the putative employer shows both that the worker has been and will continue to be free from control or direction in the performance of the work, under the contract of service and in fact, and that the worker is engaged in an independently established trade, occupation, profession, or business. The Idaho Supreme Court has described covered employment as 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. Workers' compensation asks a different question, defining an independent contractor in Idaho Code 72-102(16) 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 that result is accomplished. Idaho requires no written independent contractor agreement, prescribes no clauses for one, and attaches no presumption to what one says. The writing obligations that exist are filings with state agencies rather than contract terms.
Key Things to Know
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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.
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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.
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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.
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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.
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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.
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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.
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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.
Key decisions before you file
Before you file a Independent Contractor Agreement in Idaho, 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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Idaho Requirements for Independent Contractor Agreement
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.
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.
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.
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).
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.
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 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 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 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.
Frequently Asked Questions
No. No Idaho act requires the engagement to be in writing, prescribes what the writing must say, or creates a presumption that depends on its wording. The two writing obligations that do exist are filings rather than contract terms: a signed report of pertinent facts to the Department of Labor under Idaho Code 72-1316(7) when an employer claims services are not covered employment, and an election under Idaho Code 72-213 to bring an otherwise exempt employment within workers' compensation coverage.
Idaho Code 72-1316(4) treats services performed by an individual for remuneration as 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 established and the putative employer carries the burden on each.
No. The Idaho Supreme Court in Excell Construction, Inc. v. State Department of Labor, 141 Idaho 688, 116 P.3d 18 (2005), 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 exemption has to be earned on the two statutory grounds, with freedom from control existing in theory and in fact.
There is a reporting duty when you claim the work is not covered. Idaho Code 72-1316(7) provides that 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, signed by the employer or an authorized representative. Keeping the underlying facts documented from the outset makes that report easier to prepare accurately.
By a right-to-control test. 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. Hernandez v. Triple Ell Transport, Inc., 145 Idaho 37, 175 P.3d 199 (2007), asks 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.
Direct evidence of the right to control, the method of payment, whether the employer or the worker furnishes major items of equipment, and whether there is a right to terminate the relationship at will and without liability. None of the four is controlling, and status is a question of fact decided case by case from full consideration of the facts and circumstances, with the Industrial Commission resolving conflicting evidence.
Idaho Code 72-102(16) in the current arrangement, with employee defined at 72-102(11) and employer at 72-102(12)(a). Idaho Supreme Court opinions from 2007 and 2020 cite the independent contractor definition as subsection (17) and employee as (12), which was the numbering at the time. Material that still uses those numbers is quoting a superseded arrangement rather than a different rule, so read the current subsections when checking a form.
For workers' compensation, doubt tends to be resolved toward coverage. The Idaho Supreme Court has held that when 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. That is a reason to document the arrangement carefully at the outset, and attorney review is an option where the engagement carries real exposure.
No. 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 classification test to draft against. The practical filters are the status exceptions in Idaho Code 44-1504. Idaho Code 44-1502 also fixes the state rate at seven dollars and twenty-five cents an hour, requires it to track the federal rate, and bars political subdivisions from setting a higher one.
Only as one piece of evidence. Idaho's approach is that contract terms are relevant but never controlling: freedom from control must exist under the contract of service and in fact, and the workers' compensation inquiry looks at how the relationship actually operated. A clause that describes an arrangement the parties do not follow is worse than no clause, because the mismatch itself becomes evidence.