North Dakota Independent Contractor Agreement Template
North Dakota is the one state where the answer does not change with the act: unemployment, wage and hour, and workers' compensation all run the same common law control test.
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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 title on the document, and in most states the test changes depending on which act is being applied, so the same worker can be a contractor for one purpose and an employee for another. North Dakota is the exception. Unemployment compensation, minimum wage and work conditions, and workers' compensation all run on the same common law control standard, and the wage rule gets there by literally cross-referencing the unemployment agency's rule for its content. N.D. Admin. Code 46-02-07-01(14) 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. That uniformity is worth knowing precisely because it cuts both ways. There is only one answer to get right, but a wrong answer is wrong in all three places at once, and N.D.C.C. 65-01-03(1) puts the burden of proving contractor status on the party asserting it.
Key Things to Know
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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.
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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.
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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.
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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.
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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.
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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.
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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).
Key decisions before you file
Before you file a Independent Contractor Agreement in North Dakota, 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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North Dakota Requirements for Independent Contractor Agreement
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.
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.
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.
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.
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.
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.
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.
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.
Frequently Asked Questions
North Dakota is the unusual state where one legal test answers the question for every purpose. Unemployment compensation under N.D.C.C. 52-01-01(17)(e), minimum wage and work conditions under N.D. Admin. Code 46-02-07-01(14), and workers' compensation under N.D.C.C. 65-01-03(1) all apply the same common law control standard. In most states the applicable test changes with the act, so a document has to be drafted against several standards at once. Here it only has to satisfy one.
N.D. Admin. Code 27-02-14-01(5)(a) supplies the content. An employment relationship generally exists when the person for whom the services are performed has the right to control and direct the individual who performs the services, not only as to the result to be accomplished by the work but also as to the details and means by which that result is accomplished. The rule adds that the hiring party need not actually direct the manner of performance; it is enough that it has the right to do so.
Yes, and it says so in terms. The minimum wage statute at N.D.C.C. 34-06-01(2) defines an employee only as any individual employed by an employer, which states no test. The Labor Commissioner's Minimum Wage and Work Conditions Order fills the gap at N.D. Admin. Code 46-02-07-01(14), providing 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.
The party claiming it. N.D.C.C. 65-01-03(1) states the point most directly for workers' compensation: 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 that has the burden of proving it. The unemployment provision is built the same way, deeming service employment unless it is shown that the individual is an independent contractor.
No. N.D. Admin. Code 27-02-14-01(3) provides that 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 carefully drafted agreement is still worth having, because it records the terms the parties intend to live by, but the facts of the working relationship control the outcome and attorney review is an option where the stakes are significant.
Not as a general matter. No North Dakota act conditions contractor status generally on having a written contract or on any prescribed disclosure wording. Two workers' compensation exclusions are the exception: a licensed real estate salesperson or broker is excluded from the employee definition only where a written agreement provides the person will not be treated as an employee but rather as an independent contractor, under N.D.C.C. 65-01-02(17)(b)(4)(c), and a newspaper or shopping news deliverer needs a written agreement stating the individual is an independent contractor, under N.D.C.C. 65-01-02(17)(b)(6).
Yes, in the workers' compensation act. N.D.C.C. 65-01-03(2) supplies a rebuttal safe harbor for operators of commercial motor vehicles with a gross vehicle weight rating over twenty-six thousand pounds, keyed to whether the operator owns the truck or tractor or holds a bona fide lease of it. It is a route to rebutting the statutory presumption of employment rather than an automatic exemption, so the underlying common law analysis still matters.
It is far less likely here than elsewhere, because the same standard applies in all three places and the wage rule adopts the unemployment rule by cross-reference. The practical consequence runs the other way, though. A determination that a worker is really an employee under one act rests on reasoning that applies equally to the other two, so a single adverse finding tends to travel rather than stay contained.
N.D.C.C. 52-01-01(17)(e) reaches services performed by an individual for wages or under any contract of hire, which is broad enough that most paid work starts inside it. The classification question is only whether the exception applies. Job Service North Dakota's rule at N.D. Admin. Code 27-02-14-01 supplies the analysis, and its subsection 3 makes clear that the parties' own labeling of the arrangement does not remove a service from the definition.