North Dakota Independent Contractor Agreement Template

Introduction

Key Things to Know

1. 1

   North Dakota runs one classification standard across all three acts. Unemployment compensation applies the common law test under N.D.C.C. 52-01-01(17)(e), minimum wage and work conditions apply it under N.D. Admin. Code 46-02-07-01(14), and workers' compensation applies it under N.D.C.C. 65-01-03(1). There is no separate statutory factor list, no ABC test, and no act-specific variation to reconcile.

2. 2

   The unemployment statute states the default. Services performed by an individual for wages or under any contract of hire must be deemed employment subject to the North Dakota unemployment compensation law unless it is shown that the individual is an independent contractor as determined by the common law test. The burden sits with the party claiming the exception, not with the agency.

3. 3

   The content of the test comes from Job Service North Dakota's rule. N.D. Admin. Code 27-02-14-01(5)(a) provides that an employment relationship generally exists when the person for whom services are performed has the right to control and direct the individual not only as to the result to be accomplished but also as to the details and means by which that result is accomplished, and that it is not necessary that the hiring party actually direct the work, only that it has the right to do so.

4. 4

   Wage and hour borrows that rule outright. The minimum wage statute at N.D.C.C. 34-06-01(2) is circular, defining an employee as any individual employed by an employer and stating no test at all. The operative standard is the Labor Commissioner's rule, N.D. Admin. Code 46-02-07-01(14), which adopts the unemployment agency's common law test by cross-reference. This cross-agency borrowing is what makes North Dakota uniform rather than divergent.

5. 5

   Workers' compensation adds an express presumption on top of the same test. Under N.D.C.C. 65-01-03(1) each individual who performs services for another for remuneration is presumed to be an employee unless it is proven that the individual is an independent contractor under the common law test, and the person asserting contractor status bears the burden of proving that fact. The definitions at N.D.C.C. 65-01-02(17) and (18) are written the same way.

6. 6

   What the parties call the relationship does not decide it. N.D. Admin. Code 27-02-14-01(3) provides that if the service is employment under one of the tests, the designation or description of the relationship by the parties as anything other than employment or employer and employee is immaterial. A well-drafted agreement records how the engagement will actually run; it does not substitute for how it runs.

7. 7

   Two narrow carve-outs are worth checking. N.D.C.C. 65-01-03(2) supplies a rebuttal safe harbor for operators of commercial motor vehicles rated over twenty-six thousand pounds, keyed to ownership or a bona fide lease of the truck or tractor. And two workers' compensation exclusions turn on what a writing says: a licensed real estate salesperson or broker under N.D.C.C. 65-01-02(17)(b)(4)(c), and a newspaper or shopping news deliverer under N.D.C.C. 65-01-02(17)(b)(6).

North Dakota Requirements for Independent Contractor Agreement

• North Dakota Unemployment Uses the Common Law Test (N.D.C.C. 52-01-01(17)(e))

  Services performed by an individual for wages or under any contract of hire must be deemed employment subject to the North Dakota unemployment compensation law unless it is shown that the individual is an independent contractor as determined by the common law test. The default is employment and the party asserting the exception carries the showing, so the agreement should record facts consistent with contractor status rather than rely on a status label.

• North Dakota Right of Control Standard (N.D. Admin. Code 27-02-14-01(5)(a))

  The operative test asks whether the person for whom services are performed has the right to control and direct the individual not only as to the result to be accomplished but also as to the details and means by which that result is accomplished. The rule adds that actual direction is not required; the right to direct is sufficient. Draft the scope and supervision terms so the hiring party specifies results and deadlines and does not reserve control over method.

• North Dakota Wage Rule Adopts the Unemployment Test by Cross-Reference (N.D. Admin. Code 46-02-07-01(14))

  The Minimum Wage and Work Conditions Order provides that the common law test in subdivisions a and b of subsection 5 of section 27-02-14-01 will be used to determine whether an individual may be considered an employee or an independent contractor. Because the wage statute itself, N.D.C.C. 34-06-01(2), states no test, this cross-reference is the operative wage and hour standard and it is identical to the unemployment standard.

• North Dakota Workers' Compensation Presumption of Employment (N.D.C.C. 65-01-03(1))

  Each individual who performs services for another for remuneration is presumed to be an employee of the person for which the services are performed, unless it is proven that the individual is an independent contractor under the common law test. The person that asserts independent contractor status has the burden of proving that fact. The definitions at N.D.C.C. 65-01-02(17) and (18) are written to the same standard.

• North Dakota Parties' Label Is Immaterial (N.D. Admin. Code 27-02-14-01(3))

  If the service is employment under one of the applicable tests, the designation or description of the relationship by the parties as anything other than that of employment or of employer and employee is immaterial. A recital of independent contractor status has no independent legal effect, so the value of the writing lies in the operational terms it sets, not in the status label it applies.

• North Dakota Commercial Motor Vehicle Rebuttal Safe Harbor (N.D.C.C. 65-01-03(2))

  For operators of commercial motor vehicles with a gross vehicle weight rating over twenty-six thousand pounds, the workers' compensation act supplies a route to rebutting the presumption of employment that is keyed to ownership of the truck or tractor or to a bona fide lease of it. Where this applies, the agreement should identify the vehicle and state whether the operator owns or leases it.

• North Dakota Real Estate Salesperson Written Agreement (N.D.C.C. 65-01-02(17)(b)(4)(c))

  A licensed real estate salesperson or broker is excluded from the workers' compensation definition of employee only if, among other requirements, a written agreement exists between the salesperson or broker and the person for which they work providing that the salesperson or broker will not be treated as an employee but rather as an independent contractor. The writing is a condition of the exclusion, not merely evidence of it.

• North Dakota Newspaper and Shopping News Deliverer Writing (N.D.C.C. 65-01-02(17)(b)(6))

  A newspaper or shopping news deliverer is excluded from the workers' compensation employee definition only where remuneration is sales-based and a written agreement exists between the individual and the publisher stating that the individual is an independent contractor. Both halves are required, so a sales-based pay arrangement with no writing does not qualify.