When you own a small business, your workload naturally waxes and wanes as time goes by. You might not be ready to take on your own employees, or perhaps you need to have some work done that falls outside your realm of expertise. Either way, one possible solution is to start working with independent contractors. What are some steps you need to take when you’re onboarding these workers?
Fill Out Tax Forms and Other Paperwork
This is one of those housekeeping tasks that you can’t neglect. The information the contractor will need to fill out for this is fairly basic, so it won’t take a lot of time. It will even save time in the long run, especially when January rolls around and you’re required to issue 1099 forms to all independent contractors to whom you have paid more than $600 in the foregoing year.
There are other forms that you should have the contractor fill out as well. For example, you should have them fill out a questionnaire that gives you answers about their business, their certifications, their licenses, and any other relevant information that could impact whether you hire them.
Set Clear Expectations
Technically, an independent contractor is not your employee, but they should still know what you expect of employees. In line with that, you can give them a copy of your employee handbook. It will let them know about your standards for quality work, your procedures, and other necessary items. When the contractor is well-informed, you can avoid problems and misunderstandings down the road.
Keep in mind that you cannot tell a contractor exactly how to get their work done; they may have their own methods for achieving a desired result. As long as everything they do is legal and fits within your schedule, be willing to adapt to the contractor’s approach to certain tasks.
Establish a Payment Agreement
If this is the first time you’ve ever hired an independent contractor, you have a few decisions to make about how to pay them. You can pay by the hour or by the job — whichever one is more appropriate for the given situation. Be sure that the contractor understands which method you’ve chosen.
You also need to think about when you’ll pay the contractor. Will you work it into your regular payroll schedule, or will you settle with the contractor immediately after the work is completed? Will you wait until the end of the month? Set clear guidelines about when you will issue payment.
If a contractor’s work isn’t what you expected, can you refuse to pay them? You might put a clause in the work agreement saying that you will not pay until after a job is completed to satisfaction, but if you refuse to pay altogether, the contractor could take you to court. Be cautious so you don’t set yourself up for an ugly legal battle.
Hiring independent contractors is a great way to get help for your small business when you need it. Take the above steps to onboard these people so your relationship with them can thrive.
