Free Texas Independent Contractor Agreement Template

A Texas independent contractor agreement is a written contract between a business and a self-employed worker. It covers the job, the price, and the timeline.

Texas handles workers’ compensation differently from most states. That difference shapes what your agreement should say about insurance.

In Texas, private employers may choose whether to carry workers’ compensation coverage. The state does not require it in most cases, and that single fact shapes contractor arrangements throughout.

Subscribers and Non-Subscribers

Employers that purchase coverage are subscribers. Those that decline are non-subscribers, and so are employers that end an existing policy.

Non-subscribers take on specific obligations. They must post a notice of no coverage in the workplace, position it where employees regularly see it, provide written notice to new employees, and file notice with the Division of Workers’ Compensation.

Governmental entities follow a different rule, however. All Texas public schools, utilities, cities, and counties must carry coverage.

Why Coverage Status Belongs in Your Agreement

Because coverage is optional, neither party should assume the other holds it. Every Texas independent contractor agreement should therefore state plainly who carries insurance and who does not.

Many general contractors require proof of coverage regardless of what state law demands. Review the prime contract before concluding that coverage is unnecessary.

A specific filing that settles contractor status as a matter of law. Under Texas Labor Code Section 406.145, a hiring contractor and an independent subcontractor may make a joint agreement declaring that the subcontractor is an independent contractor and not an employee.

Where both parties sign it and file it with the division, the subcontractor is an independent contractor as a matter of law. That subcontractor is then not entitled to workers’ compensation coverage through the hiring contractor.

Few states offer anything this definitive, which is why the filing is worth knowing about.

Section 406.141 defines independent contractor for this purpose. To qualify, the person must be:

• Paid by the job, not by the hour or another time-measured basis
• Free to hire as many helpers as desired and to set each helper’s pay
• Free to work for other contractors, or to send helpers to other contractors, while under contract

The commissioner prescribes the forms, and statutory terms change, so confirm current requirements with the Texas Department of Insurance before filing.

An ordinary contractor agreement is private and goes to no office. The joint agreement described above is the exception, and it applies to building and construction work.

1. Settle the scope and confirm payment runs by the job, not by the hour.
2. State clearly whether either side carries workers’ compensation coverage.
3. Both parties sign and date the agreement.
4. For construction work, consider whether a joint agreement fits the arrangement.
5. Keep the signed contract, invoices, and any insurance certificate together.

Your terms should match how Texas describes an independent contractor. Cover:

• Payment basis — by the job, with milestones rather than hours
• Helpers — the contractor’s right to hire and pay their own
• Other clients — the freedom to work for other contractors
• Insurance — who carries coverage, and what the other side must show
• Ownership — who holds rights to the finished work

Because coverage is elective in Texas, the insurance clause deserves more thought here than elsewhere. Do not leave it to a standard paragraph.

Build your Texas independent contractor agreement now and download a signed copy the same day.