There are clear defining lines between Contractors - independent operators who are free to work for other parties should they wish to, and employees - who are bound by employment contracts and generally work exclusively for one party.
Getting confused or blurring the lines can end up becoming an employment problem - even if it's the result of failing to check adequately. The onus is firmly on the employer to be sure about which you are employing and ensure the appropriate agreements are in place.
This template allows you to clearly identify whether you are hiring a Contractor or if you are hiring an Employee. It is very important that you understand which you are hiring, as the rules of engagement and the requirements of how you manage each are different. It's best to be clear in order to not end up with an unintentional employment error in judgement. It is your responsibility to determine which way you treat either contractors or employees.