Legitimate Job Contracting

In order to reduce operational costs and avoid liabilities, a business outsources a work to an independent contractor. This is referred to as legitimate job contracting or outsourcing, wherein a principal farms out to an independent contractor or a subcontractor a particular job, work, service, or project, within a definite or predetermined period, regardless of whether they are to be performed or completed within or outside the premises of the principal.[1] There is no employer-employee relationship between the principal and the independent contractor or subcontractor.

A person is considered engaged in legitimate job contracting or subcontracting once all the following conditions are present:[2]

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