Hiring contractors can be a great way to augment your workforce and bring in specialized skills, but it’s important to ensure that you’re onboarding them properly to avoid any regulatory issues down the line.
Here are four golden rules for contractor onboarding that will help protect your business:
1. Identify the contractor’s priorities and document their deliverables
Before bringing on a new contractor, it’s important to have a clear understanding of what they’ll be working on and what their priorities are. This will help you ensure that their work aligns with your business goals and that you’re getting the most value from their services. Documenting the deliverables and scope of work in writing can also help prevent miscommunications and ensure that everyone is on the same page.
2. Have a compliant signed independent contractor agreement
A well-drafted independent contractor agreement is a critical part of the onboarding process. This document outlines the terms of the contractor’s engagement, including payment, scope of work, and other important details. It’s essential that the agreement is compliant with all applicable laws and regulations and that both parties sign it before work begins.
3. Create a Contractor Onboarding Guide and Checklist
Onboarding a new contractor can be complex, with many moving parts to manage. To help ensure that everything is done correctly, create a Contractor Onboarding Guide and Checklist. This document should include all the steps that need to be taken, from verifying the contractor’s eligibility to work in the US to setting up their payment and communication channels.
4. Ensure the independent contractor is NOT improperly classified
Finally, it’s important to ensure that the contractor is properly classified as an independent contractor and not an employee. Misclassifying a worker can lead to legal and financial consequences down the line, including fines and back taxes. The IRS has strict guidelines for determining whether a worker is an independent contractor or an employee, so it’s important to get this right from the outset.
By following these four golden rules for contractor onboarding, you can help ensure that your business stays on the right side of the law and that your contractors are set up for success.