Contracting via Individuals as Independent Contractors

Independent contractors are individuals who offer their services for a fee to a client/principal in the form of a business and thus they are not considered as employees but as professionals, talents, or freelancers.

1. Concept

“Independent Contractor”- refers to an individual or a registered business offers services for a fee to a client/principal.

(NB: There are two kinds of an independent contractor, namely: an individual who is skilled/talented/an expert, or a legitimate job contractor which is a registered business.)

“Client” or “Principal” – refers to an individual or a registered business who has farmed out job, work, or service to an independent contractor who shall perform such according to his/her own method or discretion.

For purposes of this article, the focus is on independent contractors who are individuals.

a. Legal basis

The legal basis for an independent contractor agreement is primarily found in the Labor Code, to wit:

ART. 106. Contractor or Subcontractor. Whenever an employer enters into a contract with another person for the performance of the former's work, the employees of teh contractor and of the latter's subcontractor, if any, shall be paid in accordance with the provisions of this Code. (P.D. 442, Labor Code)

In addition, the Civil Code provisions on the law on contracts further supports an independent contractor agreement, which is also known as a contractor for services. In such a contract, individuals who are independen...

 



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