November 15, 2022
So, you’re getting ready to hire on your first team member! Yay! That’s an exciting step to take in your business. But if you’re not fully ready to hire an employee on full or part-time yet, you’re probably thinking about hiring an independent contractor.
Taking that step can be scary — but only because many of us aren’t sure what it takes to hire a contractor. It’s not like they teach this in school, right? So we thought we’d compile a few of our best tips for hiring independent contractors successfully (and legally).
As a business owner and (soon-to-be) leader of a team, you have to treat independent contractors differently than you’d treat an employee. First and foremost, you need to make sure that the person you’re hiring as a contractor is performing the responsibilities of a contractor and NOT those of an employee.
In other words, check the laws in your state and the laws on a federal level. You can’t expect independent contractors to adhere to your working hours, and you can’t control what they do with their time when they aren’t working on your projects. So if they want to freelance for another company, you don’t have the right to tell them not to. (You can’t require a non-compete for an independent contractor!)
Misclassifying independent contractors can be a big issue with the IRS and Department of Labor, so make sure you check into all rules and guidelines!
Just like you’d be prepared to bring a new employee onto your team, you want to prepare the onboarding process for your new contractor.
Contractors are amazing, but they aren’t mind readers! You can’t hire a contractor and expect them to simply know everything they need to do. Instead, get clear on the duties of the role and responsibilities you want this person to fulfill. Have an open, honest discussion with them to ensure you’re both on the same page of what the role will entail. And then… make sure you put that into a written contract so that there is no question of job duties and responsibilities later on!
No one likes being thrown into the lion’s den! Before you even start interviewing new team members, it’s important to consider the responsibilities you’re looking for in the role, the skill level, the length of time of engagement, and any other pertinent information.
Especially when we’re working in remote environments, it can be difficult to figure out how to stay on top of communication with a contractor, without overwhelming them. Remember, contractors are not your employees. Therefore, it can be really helpful to check in frequently, without micromanaging. Have a specified platform for communication, like Slack, and a second platform for project management (like ClickUp).
You knew this was coming! Considering we’re all about contracts over here, we couldn’t finish this article without telling you just why a solid contract is the absolute best thing you can do when hiring an independent contractor.
When you don’t have a written contract, there’s a chance for confusion between yourself, your contractor, and potentially even the IRS. When you have a written contract, though, you know what to expect in terms of delivery and deadlines, when to pay your independent contractor, and what to do if it’s just not working out and you have to cut them loose.
A contract will also clearly state the working relationship with an independent contractor — so you do not have to worry about rule changes from the Department of Labor affecting you or even risking fines.
A great contract can be your best protection if things ever were to go south. Our Independent Contractor Template is a great place to start!
In less than 10 minutes, your attorney-prepared and peer-reviewed contract can be in your future team member’s inbox, ready to get you all of to an amazing start!
This contract has been written and peer-reviewed by graduates of 20 different law schools, and ensures that you safeguard yourself and your business whenever you bring on a new contractor!