How to e-sign a contractor agreement (1099)

1099 contractor agreements (US) must establish independent contractor status, not employee status. Misclassification risk is significant.

Critical elements

1. Independent contractor status — explicit statement 2. Scope of work — what the contractor will do 3. Deliverables — measurable outputs 4. Payment terms — per-project, hourly, or milestone 5. Timeline — start and end dates 6. No employee benefits — explicit statement 7. No withholding — contractor responsible for taxes 8. IP assignment — who owns deliverables 9. Confidentiality — often separate NDA 10. Term and termination 11. Governing law

Employee vs. contractor test (US)

IRS uses 20-factor test; California uses ABC test. Contractor status requires:

• Contractor controls how work is done (not just what)
• Contractor works for other clients
• Contractor uses own tools/equipment
• Contractor has own business entity (preferred)
• Payment per-project or per-deliverable (not hourly salary)

Misclassified employees trigger back taxes, penalties, retroactive benefits.

W-9 collection

Before first payment, collect IRS Form W-9 from contractor (or W-8BEN for non-US). E-signable on SignBolt.

Australia equivalent

Australian contractors are called independent contractors; rules in the Fair Work Act + ATO guidance. Collect TFN declaration and ABN before payment.

Workflow

1. Draft contractor agreement from template 2. Send via SignBolt bundled with W-9 and NDA 3. Contractor signs all three 4. Work begins; invoices reference the signed agreement 5. 1099 issued at year-end based on payments

Common mistakes

• Treating the same person as employee and contractor (pick one)
• Paying contractor on a regular weekly schedule (smells like employee)
• Contractor working exclusively for you (smells like employee)
• No written agreement (you default to ambiguity — worst case)

Next

• How to avoid 1099 misclassification
• W-9 e-signing