FAQ: Contracting via Individuals as Independent Contractors

Answers to frequently asked questions on individuals as independent contractors in the Philippines.

1. Are individuals who are independent contractors considered as employees?

No, individuals who are independent contractors are not employees. They are engaged in the business of providing services through their special skills, expertise, or talent.

2. What is the consequence if there is a finding of an invalid independent contractor agreement?

If there is a finding of an invalid independent contractor agreement, the supposed independent contractor would be declared to be an employee of the client/principal, who, in turn, would be considered as the employer. As an employee, the then-independent contractor would be entitled to all the employ benefits owing to and similar to the employees of the client/principal.

3. Who has the burden of proof to establish the validity of an independent contractor arrangement?

The employer has the burden of proof to establish the validity of an independent contractor agreement. This is due to the presumption that a person under employ is presumed to be a regular employee unless proven otherwise. To avert application of such principle, the employer would have to clearly show that a contractor for services, and not an employment contract, was entered into by the parties.
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