; (B) that has entered into employment by agreement under section 104 with a service provider payee; or (C) for whom a service recipient payee has elected to be classified as an employee under section 105. (8) Employment by agreement The term employment by agreement means an agreement, whether written or otherwise, between a service recipient payor and a service provider payee that demonstrably expresses their mutual intent to form an employer-employee relationship. (9) Formal bona fide contractor The term formal bona fide contractor , when used with respect to a service provider payee providing goods or services to a service recipient payor, means a service provider payee who— (A) is recognized as a contractor under applicable State law; or (B) is not required to provide the goods or services exclusively for the service recipient payor and has— (i) entered into a written contract governing the terms of the goods or services provided to the service recipient payor that is not designated as an employment by agreement; (ii) incurred unreimbursed expenses related to providing the goods or services to the service recipient payor annually that exceed 5 percent of the total compensation made to the service provider payee by the service recipient payor; and (iii) not had a substantial economic relationship or employment by agreement with the service recipient payor as described in section 104 during the previous calendar year. (10) Independent contractor The term independent contractor means a service provider payee who— (A) is classified as a mandatory independent contractor under section 103