3. How to Structure an Independent Contractor Relationship
a. How to Properly Document the Relationship
The contract should avoid any terminology, description or reference to a remuneration-mechanism that could be used in a re-characterization request by the worker (as described in part II). The definition of the mission and the terms must be very clear and allow for no ambiguity regarding the absence of a subordination relationship between the two parties. The autonomy granted to the worker must be explicitly stated in the agreement.
French case law has established that the calculation of the remuneration is a hint that the judge can use to determine that a contractual relationship must be re-characterized as an employment contract. In order to avoid this risk, the independent worker must receive a remuneration that is calculated based on the mission accomplished. In other words, it is essential to avoid calculating the remuneration based on the time the worker spends, as this may be used to request re-characterization.
During the relationship, it is important to ensure that the company requests the appropriate documentation regarding the independent worker’s authorization to work.
The Company should not issue any pay slips. Normally, independent contractor’s fees are not paid on a monthly basis, as it is the case for the employees. He is paid upon accomplishment of his work assignment.
b. Day-to-Day Management of the Relationship
As mentioned above, the existence of an employment relationship depends on the actual conditions under which the work is carried out, regardless of the name or terminology given to the relationship by the parties. As a result, in order to avoid any risk of re-characterization, it is imperative to make sure – on a daily basis – that the independent contractor retains his autonomy in carrying out his duties at all times. Below are a few guidelines on how to avoid such risk.
i. Make sure that the independent contractor is registered with the Trade Registry as a self-employed independent contractor. For services agreements with a value of at least 3,000 euros, the Company must verify that the independent contractor is in full compliance with his registration, social and tax requirements.
ii. Make sure that the independent contractor is not put under a subordination relationship. Therefore, he should not receive direct orders and instructions from the company. If the parties can establish tasks and objectives together, the independent contractor should remain as autonomous as possible when it comes to carrying out the work assignment.
iii. The independent contractor should not be given any company email, office, business card, or equipment. The latter could occasionally use company facilities, but it is necessary to make sure that he carries out his work mainly by his own means. He should have his own office outside the company. The company could allow him to occasionally use a company office, but he should not spend all his working time in the company office.
iv. Make sure that the independent contractor has his own portfolio of clients and that the company is not his sole client.
v. The independent contractor should not be subject to company working hours. He should be able to arrange his working time as freely as possible.