Virginia Independent Contractor Agreement Template

Q: What makes a Virginia independent contractor agreement different?

Virginia prescribes no clause wording and no formatting for these agreements, so the difference is not in the paperwork. It is in the test. Since 2020 the Code adopts the standard used by the Internal Revenue Service, together with a presumption of employment, in Va. Code 60.2-212(C) for unemployment insurance and in Va. Code 40.1-28.7:7(C) for the private misclassification suit. A Virginia agreement is therefore drafted to the common law control factors rather than to an ABC test.

Q: Does Virginia use the ABC test?

No. Virginia is in the minority of states whose unemployment statute is not an ABC test. The 2020 amendment to Va. Code 60.2-212 replaced the earlier formulation with a straight incorporation of the federal standard, so the analysis runs on the common law right of control factors reflected in 26 C.F.R. 31.3121(d)-1 rather than on a three prong outside the usual course inquiry.

Q: Did the 2020 changes cover workers' compensation in Virginia?

Title 65.2 was not amended, and that is the single most important thing to know. The Virginia Workers' Compensation Commission still applies common law principles to the definition of employee in Va. Code 65.2-101, asking whether the worker is selected, can be dismissed, earns pay or wages, and whether control is exercised over the means and method by which the work is performed, with the control factor given the greatest weight. There is no presumption inside Title 65.2 and the claimant carries the burden of proving employee status.

Q: What about Va. Code 58.1-1900, which mentions Title 65.2?

That provision sits in the tax code and recites an employee presumption for the purposes of that title and of Title 40.1, Title 60.2, and Title 65.2. Whether that language displaces the Workers' Compensation Commission's common law inquiry, or instead serves as the Department of Taxation's measure for the civil penalties in Va. Code 58.1-1901, has not been settled by a published Virginia appellate decision. Treat it as unresolved rather than as a safe harbor, and plan around the test the Commission actually publishes.

Q: What can a worker recover in a Virginia misclassification lawsuit?

Va. Code 40.1-28.7:7 creates a private right of action with a three year limitations period. A worker who prevails recovers the remedies, damages, and other relief available in an action brought under subsection K of Va. Code 40.1-29, which is the Virginia wage payment remedy set: unpaid wages, interest at eight percent, and in knowing cases treble damages and attorney fees. Because subsection C presumes employee status, the hiring party is the one who has to prove the classification.

Q: Does Virginia require a written independent contractor agreement?

Not for ordinary engagements. There is no general written contract requirement and no mandatory clauses. The exception is narrow and occupation specific: under Va. Code 60.2-212(D) a licensed real estate salesperson or real estate appraiser is outside employment for unemployment insurance purposes only where the services are rendered pursuant to an executed independent contractor agreement and compensation is solely by way of commission or fee. There the contract is a condition of the status, not merely evidence of it.

Q: Can a worker be a contractor for one Virginia law and an employee for another?

Yes, and it is a common outcome here because the tests live in different titles. A worker may satisfy the Internal Revenue Service standard for unemployment insurance under Va. Code 60.2-212(C) and still be found an employee by the Workers' Compensation Commission, which weighs control over the means and method most heavily and applies no presumption in the hiring party's favor. Consistency in how the relationship is actually run matters more than which document was signed.

Q: Does giving a contractor masks or safety gear hurt the classification?

Not under the unemployment statute. Va. Code 60.2-212(E) provides that supplying personal protective equipment during a declared communicable disease of public health threat may not be considered in determining whether the individual is an employee. It is a targeted carve out and does not extend to other kinds of equipment, so supplying general tools and materials still reads as a control factor under the common law analysis.

Q: Does signing an agreement settle the classification in Virginia?

No, and the Workers' Compensation Commission says so in as many words: designating a worker an independent contractor or paying on a 1099 does not define employment status. Both the unemployment provision and the misclassification provision start from a presumption that the worker is an employee, so the agreement is a piece of evidence that has to be matched by the facts of the engagement. Where the exposure is significant, attorney review is an option.

Virginia adopted the IRS standard with a presumption of employment in 2020, but it did so through three separate doors, and none of them opened onto workers' compensation.

Find out where you stand in Virginia

What do you need the contractor agreement for?

DocDraft provides document preparation, not legal advice.

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. Virginia does not require one for ordinary engagements, and it prescribes no clause wording or formatting the way a handful of states do. What Virginia does instead is rewrite the classification test, and it rewrote it unevenly. In 2020 the General Assembly put the federal common law standard used by the Internal Revenue Service into the statute books together with a presumption that the worker is an employee, but it did that through three separate provisions: Va. Code 60.2-212(C) for unemployment insurance, Va. Code 40.1-28.7:7(C) for the private misclassification lawsuit, and Va. Code 58.1-1900(A) in the tax code. Title 65.2, the workers' compensation title, was never amended, and the Virginia Workers' Compensation Commission still publishes a four factor common law control test with no presumption at all. Anyone who reads the 2020 changes as a single comprehensive reform will get workers' compensation wrong, which is the one act where the cost of being wrong arrives as an uninsured injury claim.

Key Things to Know

1
Virginia is not an ABC state. Va. Code 60.2-212(C) provides that services performed by an individual for remuneration shall be deemed to be employment subject to the unemployment title unless the Virginia Employment Commission determines that the individual is not an employee for purposes of the Federal Insurance Contributions Act and the Federal Unemployment Tax Act, based upon an application of the standard used by the Internal Revenue Service. Deemed employment is the starting position, and the party asserting contractor status carries the burden of dislodging it.
2
A different provision governs the private lawsuit. Va. Code 40.1-28.7:7(C) provides that in a proceeding under subsection B an individual who performs services for remuneration is presumed to be an employee, and the person who paid is presumed to be the employer, unless it is shown that the individual is an independent contractor as determined under Internal Revenue Service guidelines. Subsection A defines that phrase to include the most recent IRS guidelines, the agency's interpretation of common law doctrine, and 26 C.F.R. 31.3121(d)-1. The presumption is expressly confined to a proceeding under subsection B.
3
The 2020 reform did not reach workers' compensation, and that is the trap. Title 65.2 was not amended. The Virginia Workers' Compensation Commission tells employers directly that designating a worker an independent contractor or paying them on a 1099 does not define employment status, that the question is governed by common law principles, and that a person is generally an employee if they are selected, can be dismissed, earn pay or wages, and control is exercised over the means and method by which the work is performed, with that last factor given the greatest weight.
4
The only text that purports to carry the employee presumption into workers' compensation sits in the tax code. Va. Code 58.1-1900(A) recites the presumption for the purposes of that title and of Title 40.1, Title 60.2, and Title 65.2. Whether that displaces the Commission's own common law inquiry, or works only as the Department of Taxation's yardstick for the civil penalties in Va. Code 58.1-1901, is an open question with no published Virginia appellate decision resolving it. The prudent planning assumption is that the Commission applies the test it publishes.
5
One narrow group does need the paperwork. Under Va. Code 60.2-212(D), real estate salespersons licensed under Chapter 21 of Title 54.1 and real estate appraisers licensed under Chapter 20.1 of Title 54.1 escape employment for unemployment insurance purposes only where the services are rendered pursuant to an executed independent contractor agreement and the person is remunerated solely by way of commission or fee. No executed agreement, or any element of hourly or salaried pay, and the exclusion is unavailable.
6
Supplying safety equipment does not count against you. Va. Code 60.2-212(E) provides that the provision of personal protective equipment during a declared communicable disease of public health threat may not be considered in determining whether an individual is an employee. It is a narrow safe harbor, but it removes one factor that would otherwise look like control.
7
Because the tests sit in different titles, a single worker can come out differently under each. The realistic Virginia outcome is a worker who is a contractor under the Internal Revenue Service standard for unemployment insurance and for a wage misclassification claim, and still an employee before the Workers' Compensation Commission because control over the means and method of the work was exercised in practice. Draft to the strictest of the tests that could apply, and make sure the day to day conduct matches the document.

Key decisions before you file

Before you file a Independent Contractor Agreement in Virginia, 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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Virginia Independent Contractor Agreement (Compact State Terms)

This is the Virginia layer only. Scope, deliverables, fees, ownership of work product, confidentiality, indemnity, term and termination, and the general contract mechanics sit in the main body of the Independent Contractor Agreement and are not repeated here. Insert the clauses below into that agreement, or attach them as a Virginia rider.

A. Status and governing standard. Contractor is an independent contractor and not an employee, agent, partner, or joint venturer of Company. Classification is decided by law, not by the title of this Agreement. Va. Code 60.2-212(C) deems services performed for remuneration to be employment unless the Virginia Employment Commission determines the individual is not an employee for purposes of the Federal Insurance Contributions Act and the Federal Unemployment Tax Act under the standard used by the Internal Revenue Service. The same guidelines control a misclassification proceeding under Va. Code 40.1-28.7:7, which defines them to include 26 C.F.R. 31.3121(d)-1.

B. Control of means and manner. Contractor determines the means, manner, methods, sequence, and hours of performing the Services. Company may specify the result and the date it is due, and may inspect the finished work, but does not instruct Contractor on how the work is done, set a work schedule, provide training, or require routine progress reports.

C. Independent business. Contractor holds Contractor out to the public as self-employed, is free to accept work from others during the Term, supplies Contractor's own tools, bears the opportunity for profit and the risk of loss, and may engage assistants at Contractor's own cost.

D. Workers' compensation is a separate question. Title 65.2 was not amended when the Internal Revenue Service standard was written into other titles, and the Virginia Workers' Compensation Commission applies common law principles to the definition of employee in Va. Code 65.2-101: whether the worker is selected, can be dismissed, earns pay or wages, and whether control is exercised over the means and method of the work, with that last factor given the greatest weight. Nothing here decides coverage. Contractor shall maintain workers' compensation coverage where required and furnish a certificate on request.

E. Taxes. Company will not withhold income tax, Social Security, or Medicare, and will report payments on IRS Form 1099-NEC where required. Contractor is responsible for all federal, state, and local taxes on amounts paid.

F. Real estate rider, use only where it applies. For a real estate salesperson licensed under Chapter 21 of Title 54.1 or an appraiser licensed under Chapter 20.1 of Title 54.1, Va. Code 60.2-212(D) removes the services from employment only where they are rendered pursuant to an executed independent contractor agreement and Contractor is remunerated solely by way of commission or fee. Do not pair this rider with hourly or salaried pay.

G. Protective equipment. Company's provision of personal protective equipment in response to a declared communicable disease of public health threat is not a factor in determining Contractor's status, per Va. Code 60.2-212(E).

H. Governing law. This Agreement is governed by the laws of the Commonwealth of Virginia, without regard to its conflict of laws rules.

This Virginia edition is general information, not legal advice; attorney review is available.

Virginia Requirements for Independent Contractor Agreement

Virginia Unemployment Insurance Runs on the IRS Standard With an Employee Presumption (Va. Code 60.2-212(C))
Services performed by an individual for remuneration are deemed to be employment subject to Title 60.2 unless the Virginia Employment Commission determines that the individual is not an employee for purposes of the Federal Insurance Contributions Act and the Federal Unemployment Tax Act, based upon an application of the standard used by the Internal Revenue Service. This is a common law right of control analysis, not an ABC test, and the burden of dislodging deemed employment falls on the party asserting independent contractor status.
Virginia Misclassification Suit Presumes Employment Under IRS Guidelines (Va. Code 40.1-28.7:7(C))
In a proceeding under subsection B, an individual who performs services for remuneration is presumed to be an employee of the person who paid, and that person is presumed to be the employer, unless it is shown that the individual is an independent contractor as determined under Internal Revenue Service guidelines. Subsection A defines those guidelines to include the most recent IRS publication, its interpretation of common law doctrine on independent contractors, and 26 C.F.R. 31.3121(d)-1.
Virginia Misclassification Remedies and Limitations Period (Va. Code 40.1-28.7:7 and 40.1-29(K))
The private right of action carries a three year limitations period, and a prevailing worker recovers the applicable remedies, damages, or other relief available in an action brought pursuant to subsection K of Va. Code 40.1-29. That set includes unpaid wages, interest at eight percent, and in knowing cases treble damages and reasonable attorney fees, so the exposure from a single misclassified engagement is not limited to back pay.
Virginia Workers' Compensation Still Uses Common Law Control With No Presumption (Va. Code 65.2-101)
Title 65.2 was not amended to import the Internal Revenue Service standard. The definition of employee in Va. Code 65.2-101 reaches every person in the service of another under any contract of hire or apprenticeship, written or implied, and the Virginia Workers' Compensation Commission resolves status by common law principles: whether the person is selected, can be dismissed, earns pay or wages, and whether control is exercised over the means and method by which the work is performed, with the control factor given the greatest weight.
Virginia Tax Code Presumption Naming Title 65.2 Is Unsettled in Its Reach (Va. Code 58.1-1900(A) and 58.1-1901)
Va. Code 58.1-1900(A) states the employee presumption for the purposes of Title 58.1 and of Title 40.1, Title 60.2, and Title 65.2. No published Virginia appellate decision resolves whether that language governs a proceeding before the Workers' Compensation Commission or operates only as the Department of Taxation's yardstick for the civil penalties in Va. Code 58.1-1901. Businesses should not rely on it as a workers' compensation safe harbor.
Virginia Real Estate Exclusion Is Conditioned on an Executed Agreement (Va. Code 60.2-212(D))
Real estate salespersons licensed under Chapter 21 of Title 54.1 and real estate appraisers licensed under Chapter 20.1 of Title 54.1 are outside employment for unemployment insurance purposes only where the services are performed pursuant to an executed independent contractor agreement and the person is remunerated solely by way of commission or fee. The written agreement is a gating condition of the exclusion, and any hourly or salaried component defeats it.
Virginia Protective Equipment Safe Harbor (Va. Code 60.2-212(E))
Supplying personal protective equipment to a worker during a declared communicable disease of public health threat may not be considered in determining whether that individual is an employee for unemployment insurance purposes. The carve out is limited to protective equipment and to the declared emergency setting, so furnishing ordinary tools, materials, or workspace remains a live control factor in the common law analysis.
Virginia Has No General Mandatory Clause or Formatting Requirement
Outside the narrow Va. Code 60.2-212(D) real estate exclusion, Virginia imposes no requirement that an independent contractor agreement be in writing, contain specified terms, use particular disclosure wording, or be set in any particular type. The agreement is evidence of the parties' intent, and the classification is decided on the Internal Revenue Service standard for unemployment and wage claims and on common law control before the Workers' Compensation Commission.

Frequently Asked Questions

What makes a Virginia independent contractor agreement different?

Does Virginia use the ABC test?

Did the 2020 changes cover workers' compensation in Virginia?

What about Va. Code 58.1-1900, which mentions Title 65.2?

What can a worker recover in a Virginia misclassification lawsuit?

Does Virginia require a written independent contractor agreement?

Can a worker be a contractor for one Virginia law and an employee for another?

Does giving a contractor masks or safety gear hurt the classification?

Does signing an agreement settle the classification in Virginia?

Find out where you stand in Virginia

Introduction

Key Things to Know

Key decisions before you file

Customize your Independent Contractor Agreement Template with DocDraft

Virginia Independent Contractor Agreement (Compact State Terms)

Virginia Requirements for Independent Contractor Agreement

Virginia Unemployment Insurance Runs on the IRS Standard With an Employee Presumption (Va. Code 60.2-212(C))

Virginia Misclassification Suit Presumes Employment Under IRS Guidelines (Va. Code 40.1-28.7:7(C))

Virginia Misclassification Remedies and Limitations Period (Va. Code 40.1-28.7:7 and 40.1-29(K))

Virginia Workers' Compensation Still Uses Common Law Control With No Presumption (Va. Code 65.2-101)

Virginia Tax Code Presumption Naming Title 65.2 Is Unsettled in Its Reach (Va. Code 58.1-1900(A) and 58.1-1901)

Virginia Real Estate Exclusion Is Conditioned on an Executed Agreement (Va. Code 60.2-212(D))

Virginia Protective Equipment Safe Harbor (Va. Code 60.2-212(E))

Virginia Has No General Mandatory Clause or Formatting Requirement

Frequently Asked Questions