Illinois IT independent contractor agreement template

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How Illinois IT independent contractor agreement Differ from Other States

  1. Illinois law applies the Illinois Wage Payment and Collection Act, which creates strict rules around payment terms for contractors compared to many other states.

  2. Illinois uses a multi-factor ‘right to control’ test, clarified by recent court decisions, for distinguishing contractors from employees, making classification rules more specific.

  3. Illinois requires explicit written agreements for certain independent contractor arrangements to satisfy state compliance, unlike some states where verbal agreements may suffice.

Frequently Asked Questions (FAQ)

  • Q: Is a written agreement required for IT independent contractors in Illinois?

    A: Yes, a written agreement is highly recommended to clarify roles and ensure compliance with Illinois laws.

  • Q: How does Illinois define an IT independent contractor?

    A: Illinois uses a ‘right to control’ test considering various factors, not just the contract language or job title.

  • Q: Do Illinois independent contractor agreements require specific payment terms?

    A: Yes, payment terms must comply with the Illinois Wage Payment and Collection Act for lawful and timely compensation.

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Illinois IT Independent Contractor Agreement

This Illinois IT Independent Contractor Agreement (the “Agreement”) is made and entered into as of this [Date], by and between:

  • [Client Company Name], located at [Client Company Address] (“Client”), and
  • [Contractor Name], located at [Contractor Address] (“Contractor”).

1. Services

  • The Contractor agrees to provide the following IT services to the Client: [Description of IT Services]
    • Option A: Software Development - including but not limited to [Specify Deliverables]. The technology stack to be used is [List Technologies]. Development standards will adhere to [Specify Standards].
    • Option B: Systems Integration - integrating [Specify Systems] with [Specify Systems].
    • Option C: Network Administration - maintaining the network according to [Specify Requirements].
    • Option D: Cybersecurity Consulting - implementing security measures including [Specify Measures].
  • The Contractor shall provide the services according to the following milestones and timelines: [List Milestones and Timelines]. Reporting intervals will be [Specify Intervals].

2. Work Location and Equipment

  • The primary work location will be:
    • Option A: Remote
    • Option B: On-Site at [Client Address]. Contractor agrees to adhere to Client’s policies while on-site.
    • Option C: Hybrid
  • The Client shall provide the following equipment: [List Equipment]
  • The Contractor shall use the following software and hardware: [List Software and Hardware]
  • Access to the Client’s network requires:
    • Option A: VPN access using [Specify VPN].
    • Option B: Secure access through [Specify Method].
  • Data storage will be handled as follows: [Describe Data Storage Procedures].
  • Upon termination, all Client equipment must be returned within [Number] days.

3. Service Fees and Payment

  • The payment structure is:
    • Option A: Hourly rate of [Dollar Amount] per hour.
    • Option B: Project-based fee of [Dollar Amount] for the entire project.
    • Option C: Retainer of [Dollar Amount] per [Time Period].
  • Invoicing and payment terms are: [Describe Invoicing and Payment Terms]. Invoices shall be submitted [Frequency]. Payment is due within [Number] days of invoice receipt.
  • Reimbursement for approved expenses: [Describe Reimbursement Procedures].
  • Contractor is responsible for all applicable state and local taxes in Illinois.
  • Contractor will provide a completed Illinois Form W-9 equivalent (or necessary substitutes) before payment.
  • Late payment penalty: [Describe Late Payment Penalty, in line with Illinois law].
  • Contractor [is/is not] required to register for Illinois business tax numbers.

4. Ownership and Intellectual Property

  • Ownership and licensing of work product, including source code, software, and documentation, are governed as follows: [Describe Ownership and Licensing]
    • Option A: Client shall own all rights to the final product.
    • Option B: Contractor grants Client a perpetual license to use the work product.
  • Contractor assigns all copyrights to Client.
  • Third-party code disclosures: [Describe Disclosure Requirements].
  • Compliance with Illinois intellectual property statutes is required.

5. Confidentiality and Data Protection

  • Contractor agrees to maintain strict confidentiality regarding Client's confidential information. [Define Confidential Information].
  • Contractor shall comply with all applicable data protection and privacy laws, including those specific to Illinois.
  • Clear standards for handling protected information: [Describe Standards].
  • Compliance with Client industry regulations regarding data (e.g., HIPAA, GLBA): [Specify Regulations].
  • Data breach notification and management process: [Describe Process].
  • Obligations upon termination: [Describe Obligations].

6. Independent Contractor Status

  • Contractor is an independent contractor and not an employee, franchisee, or agent of Client.
  • Contractor is responsible for their own self-employment tax, insurance, and business registration (if applicable).
  • Contractor must comply with the Illinois Department of Revenue and local tax authorities.
  • Contractor, if conducting business under a name other than their own, must register the business name with the Illinois Secretary of State.

7. Liability

  • Contractor's liability for failure to meet technical specifications, service downtime, information security incidents, unauthorized access, and malware introduction is limited as follows: [Describe Liability Limitations].
  • Indemnification obligations: [Describe Indemnification Obligations].
  • Limitations on liability and remedies are governed by Illinois law.

8. Subcontractors

  • Use of subcontractors [is/is not] permitted.
  • If subcontractors are permitted:
    • Option A: Client consent is required prior to using any subcontractor.
    • Option B: No prior consent is required, but notification is required.
  • Subcontractors must undergo background checks.
  • Compliance with Illinois employment classification standards and the Illinois Employee Classification Act is required.

9. Termination

  • Termination grounds:
    • Option A: Breach of contract.
    • Option B: Performance failure.
    • Option C: Insolvency.
    • Option D: Non-payment.
  • Notification procedures: [Describe Notification Procedures].
  • Transition of IT systems or data: [Describe Transition Procedures].
  • Final compensation: [Describe Final Compensation Terms].
  • Post-termination duties: [Describe Post-Termination Duties].

10. Dispute Resolution

  • Dispute resolution prioritizes negotiation and mediation.
  • Arbitration or litigation (where permitted) shall be exclusively under Illinois jurisdiction in [Specify County].
  • Choice of Illinois law.

11. Compliance

  • Contractor must comply with all relevant Illinois and federal IT and business compliance statutes. [List Statutes]
  • Terms are adjustable based on technology services, client industry, or evolving Illinois legal requirements.

12. Other Provisions

  • Intellectual property infringement defense: [Describe Terms]
  • Non-solicitation: [Describe Terms]
  • Non-competition (subject to enforceability and reasonableness under Illinois law): [Describe Terms]
  • Transition of services or knowledge transfer upon contract completion or termination: [Describe Terms]
  • Contract amendments: [Describe Procedures]
  • Assignment: [Describe Terms]
  • Force majeure: [Describe Terms]
  • Compliance with Illinois-specific contract formalities: [Describe Compliance]

13. Signatures

IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first written above.

____________________________
[Client Company Name]

By: [Client Representative Name]

Title: [Client Representative Title]

____________________________
[Contractor Name]

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