Contractors: A Straightforward Legal Guide for Online Entrepreneurs

If you’re hiring help for your business—whether that’s a virtual assistant, designer, or social media manager—you’ve probably wondered:

“Do I need a contract if they’re just a contractor?”

The short answer: yes. Absolutely. Every single time.

Let’s break it down.

🧾 Employee vs. Independent Contractor

The IRS and your state care a lot about how you classify people you pay.
Employees are on payroll, get W-2s, and you handle taxes.
Independent contractors (aka freelancers) get 1099s and handle their own taxes.

But here’s the catch—
If you treat a contractor like an employee (set their hours, control how they work, etc.), you could face misclassification penalties later.
That’s where a clear Independent Contractor Agreement comes in.

🛠️ What Your Contractor Agreement Should Cover

Here’s what every solid IC agreement needs:

1. Scope of Work – Spell out what they’re doing, when, and what “done” looks like.

2. Payment Terms – Rate, method, due dates, and late fees (no ghosting allowed).

3. Ownership + IP – Make sure you own the work product once it’s paid for.

4. Confidentiality + Non-Disparagement – Keep your business info private and your reputation protected.

5. Termination Clause – How either of you can walk away, and what happens to payments or deliverables.

If you’re using vague or recycled contracts from Google? You’re inviting confusion, not clarity.

💡 Pro Tip: Match the Agreement to the Relationship

Hiring someone on a project basis?
→ Use a Project-Based IC Agreement.

Bringing in someone long-term who’s practically part of your team?
→ You might need to revisit whether they’re really an employee.

A few extra minutes now saves you thousands later...trust us.

📆 Why This Matters Now

Q4 is when most online business owners start bringing in extra help to prep for launches, end-of-year admin, or holiday sales.
And tax season? 👀 You’ll need those contracts to prove who was a legit contractor when the 1099s start flying.

⚡ Want to Keep It Simple?

You don’t have to write your own contract from scratch (please don’t).
Grab our Independent Contractor Agreement Template—
✅ Attorney-drafted
✅ Easy to customize
✅ Designed for creatives, service providers, and online founders

Or, if you’re tired of piecing it all together one contract at a time, join The Legalmiga Library® Membership.
Members get instant access to every contract template (including this one) plus ongoing legal updates, workshops, and attorney support for less than the cost of one hour with a traditional lawyer.

👉 Get the Independent Contractor Template here.
👉 Join the Library Membership for full access.

Hiring help shouldn’t feel risky.
With the right legal foundation, it’s just another smart business move—one that frees you up to grow, scale, and stay protected.

Your business deserves better than legal limbo. Go handle it. 💼