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Texas Independent Contractor Agreement Template
Texas law presumes anyone you pay for services is an employee for unemployment tax purposes, and the Texas Workforce Commission looks past contract labels using a 20-factor control test. A well-drafted agreement still matters here: Texas relies on federal law for intellectual property ownership, and non-competes with contractors must be reasonable in time, geography and scope of activity.
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Texas rules to know
Workers are presumed employees
For unemployment tax, Texas presumes anyone paid for services is an employee. You can rebut that only by showing the worker is free from your direction or control, both under the contract and in practice. The Texas Workforce Commission applies a 20-factor control test, so a contract label alone is not enough.
Tex. Labor Code Sec. 201.041; 40 Tex. Admin. Code Sec. 821.5
Misclassification penalties on public work
Contractors on Texas public works projects who misclassify workers as independent contractors can face a penalty of $200 per misclassified individual, and repeat violators may be barred from state contracts. Private businesses can also owe back unemployment taxes, interest and penalties after a TWC audit.
Tex. Labor Code Sec. 214.008; Tex. Gov't Code Sec. 2155.077
Non-competes must meet a statutory test
A non-compete with a contractor is generally enforceable only if it is ancillary to an otherwise enforceable agreement and reasonable in time, geography and scope of activity. Courts can reform overbroad restrictions rather than void them. Separate, stricter rules apply to physicians and some health care practitioners.
Tex. Bus. & Com. Code Secs. 15.50-15.52
Get IP in writing
Texas has no special statute on contractor invention assignments, so federal law controls. Work by a contractor is generally owned by the contractor unless there is a signed written assignment, because work-made-for-hire treatment covers only limited categories of commissioned works. Include a clear written IP assignment clause.
U.S. Copyright Act, 17 U.S.C. Secs. 101, 201, 204
Last updated 2026-10-05
Download the free template
Our Texas Independent Contractor Agreement template as a Word document — a general starting point you fill in yourself. Sign in free to download it.
Want it written for your situation instead? Describe it in the box above and get a custom contract for $4.99.
What a independent contractor agreement covers
- Scope of services and deliverables
- Fees, invoicing and payment deadline
- Independent-contractor status and tax responsibility
- IP ownership and work-for-hire assignment
- Confidentiality
- Term, termination and kill fee
- Governing law and dispute resolution
Already have one? Get it reviewed for risks
Frequently asked questions
- How does the Texas Workforce Commission decide if my worker is a contractor?
- For unemployment tax, Texas presumes paid workers are employees. You can rebut that only by showing the worker is free from your direction or control, both under the contract and in practice. The TWC applies a 20-factor control test, so calling someone a contractor in the agreement is not enough on its own.
- Can I enforce a non-compete against a contractor in Texas?
- Generally only if it is ancillary to an otherwise enforceable agreement and reasonable in time, geography and scope of activity. Texas courts can reform an overbroad restriction rather than void it entirely. Separate, stricter rules apply to physicians and some health care practitioners, so those relationships need extra care.
- What happens if a Texas public works contractor misclassifies workers?
- Contractors on Texas public works projects can face a penalty of $200 per misclassified individual, and repeat violators may be barred from state contracts. Private businesses are not off the hook either: a TWC audit can leave them owing back unemployment taxes, interest and penalties.
- Does signing an independent contractor agreement make someone a contractor?
- No. The label in the contract doesn't decide it — how the work is actually controlled and paid does. State and federal agencies apply their own tests, and a contract that says “contractor” won't save a relationship that looks like employment in practice.
- Who owns the work a contractor creates?
- By default the contractor usually owns it, even if you paid for it. The agreement needs an express work-made-for-hire clause and a written assignment of IP to transfer ownership to your business.
- Is a free template enough?
- A template covers the common structure, but it can't know your scope, payment terms or how your state classifies workers. A custom draft fills those in for your situation.
Independent Contractor Agreement in other states
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