Hiring Independent Contractors FAQ

Questions:

• What is an independent contractor?
• What are the benefits of hiring independent contractors?
• What are the risks of hiring independent contractors?
• How do government agencies determine whether workers are ICs or employees?
• Should I ask freelancers and consultants to sign written independent contractor agreements?
• Is there anything I can do during the hiring process to make sure the worker I hire is really an independent contractor?
• Once I hire an IC, are there steps I can take to avoid classification problems with government agencies?
• Who owns intellectual property created by independent contractors?

Answer:

Who owns intellectual property created by independent contractors?

When you hire an IC to create a work of authorship such as a computer program, written work, artwork, musical work, photographs, or multimedia work, you need to be concerned about copyright ownership.

The copyright laws contain a major trap for unwary hiring companies. The hiring company will not own the copyright to the IC's work unless it obtains a written assignment of copyright ownership. An assignment is simply a transfer of copyright ownership. You should obtain an assignment before the IC starts work. This assignment should be included in the IC agreement.

There are exceptions to this rule. Certain specially commissioned works by ICs are considered to be works for hire, to which the hiring company owns the copyright. However, this rule is not automatic -- you still have to enter into a written agreement explicitly stating that the work is for hire.

For more information, see How to Protect Your Intellectual Property Rights in Works Created By Contractors.

To Learn More

For a complete guide to the ins and outs of working with independent contractors, get Working With Independent Contractors, by Stephen Fishman (Nolo).