Florida Business Law: The Difference Between Employment Agreements and Work-for-Hire Agreements

Independent contractors can be a great asset to your business. They offer specialized skills on a flexible basis, helping you address the unique needs of your business without breaking the bank. When it comes to hiring an independent contractor, you may want to draft up a contract to protect your company’s legal rights. In that case, do you go with an employment agreement or a work-for-hire agreement? Here are some of the main differences.

An employment agreement spells out the details of your legal relationship with an employee or independent contractor. It defines your rights and responsibilities as an employer, as well as the employee’s rights and responsibilities. The provisions in an employment agreement typically include:

  • The term of employment.
  • The position and duties involved with the job.
  • Salary, benefits, and other types of compensation.
  • Causes that could lead to the employee’s termination.
  • An arbitration clause to keep legal disputes out of court.

Additionally, employment agreements might contain nondisclosure agreements to safeguard your confidential or proprietary information. The state of Florida also enforces non-solicitation agreements, which prohibits employees from soliciting customers, employees, and vendors related to your company. If you want to limit the employee’s right to compete with you, both during and after the employment term, you might include a non-compete agreement with a reasonable scope.

When an employee creates work for you, the rights to that work are generally owned by you, the employer. If you are hiring an independent contractor, freelancer, or consultant to create work for you, the freelancer typically retains all legal rights as the work’s original author. A work-for-hire agreement may be used to sidestep that copyright rule.

Work-for-hire agreements allow employers to retain all rights to the work created by an independent contractor. Such an agreement must be made in writing before the work begins, with a signature from both parties, and the work must meet statutory requirements. 

The Copyright Act is narrow in the scope of works it accepts for work-for-hire agreements, so make sure the work you need falls into one of these categories—otherwise it could invalidate your contract. Sometimes the category of a work will depend on its components or its function. For example, not all software programs can be called audiovisual works, and graphic logos may or may not be admissible depending on how they’re used.

In summary, if you want to retain the rights to your independent contractor’s work, you should consider a work-for-hire agreement. While the employment agreement often has more binding terms, you may prefer it if you need greater control or if you want to keep working with the contractor for a fixed term.

You should ask a detail-minded lawyer to go over the details of your contract. The skilled business attorneys at Calevoso Law can make sure the terms are in your favor and legally enforceable. Call us to get industry-specific advice on the best choice for your business.