What to Know When Hiring an Independent Contractor

man shaking handsFrom upcounsel, Alex Liu provides advice what to consider when engaging with an independent contractor.  Alex writes:

Be Careful Whom You Label a Contractor

To cut costs, you might be considering hiring only independent contractors instead of salaried employees. However, there are IRS rules and regulations that prevent you from doing this. Thus, before hiring people as freelancers, make sure they fit the IRS definition or you might find yourself in legal trouble.

  • When They’re Considered Employees: According to the National Federation of Independent Business, if a person works regularly at a company facility, uses company-owned equipment to do their job, and must work during specified hours, that person would probably be considered an employee.
  • When They’re Considered Independent Contractors: If a person works offsite, uses his or her own equipment, pays his or her own insurance, phone and utility bills, and makes his or her own hours, that person would probably be considered an independent contractor.

Freelancers can be a cost-effective way to get essential work done. Just make sure you follow all rules and regulations and write a strong independent contractor agreement or you might not end up saving any money at all.

Read the full story at: What to Know When Hiring an Independent Contractor 

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