Independent Contractors

Independent contractors are workers with specialized skills or knowledge, who are under limited guidance and control, and don’t depend on you for their primary livelihood. Using contractors instead of employees can save costs. But it’s not always clear when a business can properly use this kind of work arrangement. Employees have strong protections under state and federal laws, and the penalties for misclassifying workers can be financially devastating.


I can help you put in place strong agreements that specify what trade secrets or proprietary information your contractors must not disclose, prevent them from soliciting your clients for their own benefit, and establish who owns the work product they create for your company, among other important requirements.


Determining if your worker is properly classified as a contractor or employee is a balancing test of numerous factors. I can help you weigh the importance of each of those for your unique situations to ensure that you are compliant, and your contractors are lawfully engaged. 


Understand your risks with independent contractors and take steps to protect your business by working with the Law Office of Wendy Anderson.

Frequently Asked Questions

  • Does Arizona allow independent contractors?

    Arizona allows independent contractors.  The relationship between an independent contractor and the person or entity using that contractor in Arizona is governed by A.R.S. 23-1601.  A worker will be presumed to be a contractor if the provisions of this statute are followed.

  • How do I protect myself as an independent contractor?

    You can protect yourself as an independent contractor by having a contract with the hiring entity to clearly establish the scope of work, the rate of pay, and the ultimate goals for the contractor to fulfill.

  • What do I need to know about working as an independent contractor?

    You must know several things about working as an independent contractor in Arizona.  An independent contractor generally performs specialized services for multiple clients.  The relationship is defined by the agreement or contract between the parties.  Since the contractor is not an employee, he or she is not protected by state and federal employment laws, and the hiring company will not withhold taxes from the contractor’s payment.


  • Can an independent contractor sue for hostile work environment?

    An independent contractor cannot sue for a hostile work environment. As an independent contractor in Arizona, the state and federal laws protecting employees from harassment and discrimination do not apply.  If an independent contractor believes he or she is subject to a hostile environment, the contractor may terminate the working relationship according to the contract’s terms.


  • What is the Independent Contractors Act?

    In Arizona, A.R.S. 32-1601 is the statute that provides the guidelines for an independent contractor relationship.  If the provisions of this Declaration of Independent Business are met, then the law presumes the worker is a contractor and not an employee.


  • What is the difference between being self-employed and an independent contractor?

    The primary difference between being self-employed and an independent contractor is that when you are self-employed, you earn money but do not work for any other person or entity, and when you are an independent contractor, you earn money by providing a service for another person or company.  An independent contractor is one form of being self-employed.

  • Should an independent contractor form an LLC?

    An independent contractor will have certain important legal protections if they form and work under an LLC.  If the contractor is held liable for damages occurring as a result of the contractor’s work, the LLC structure will provide a liability shield.  This means that only the assets of the LLC, not the personal assets of the contractor, can be taken if there is a money judgment against the contractor.