Mistakes Commonly

Mistakes Commonly Made When Hiring Independent Contractors

Business

Choosing between a permanent employee or an independent contractor can be a difficult decision. Both have their benefits as well as their risks. Many businesses choose to hire contractors due to the associated costs and investment of employees. The hiring and training process for an employee is lengthy and requires a certain investment of time and resources. A contractor, alternatively, is relatively easy to source and hire. However, they have their own associated risks.

1. Forgetting Boundaries

When working with an independent contractor, it is crucial to maintain a healthy relationship. They are likely to operate with their own tools and software. Sometimes, this may not resonate with your company or personal design. However, due to the limitations of the contract, you won’t be in a position to dictate any changes.

While there is a certain remit, an independent contractor will work in their own way to achieve the job you have set out. Forgetting this or expecting certain protocol outside of the contractual stipulations will likely ensure negative repercussions, as well as the breakdown of a professional relationship. This can also extend to expect work to be performed during certain hours or within certain locations. Unless directly specified at the point of signing a contract, the independent contractor remains free to complete the task as they feel best.

2. Adopting incorrect Payroll

Perhaps the most common mistake made is payroll. It is also the most potentially damaging for your business. Not only is it crucial that you meet the expectations of payment set out by an independent contractor but you must also adhere to the strict contractor tax laws set out by the British government and tax office. Failing to do so or misclassifying your employee-contractor relationship may result in a significant fine.

Different contractors will have various expectations when it comes to payroll and it is important to assure this adheres with tax law. For those who deal with multiple contractors or might want absolute peace of mind when managing payroll, adopting umbrella payroll from People Group Services or a similarly expert payroll company, will alleviate you of any worry, placing the responsibility for up-to-date compliance and professional payroll in good hands.

3. Neglecting Your Insurance

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The terms of your employment insurance are something you should be familiar with. However, most policies will also have certain stipulations that describe the coverage of independent contractors. If they do not, you should reevaluate both the job, its associated risks, and your insurance before undertaking the task.

It is often the result of complacency that a business fails to adapt their insurance cover to deal with temporary workers and, due to the severity of some events, this can be a major issue for a company’s liability.

4. Accepting False References

It may be well known that many reviews online are manipulated or that prospective employees can disguise their employment history. With contractors it is no different and, when assessing your potential recruiter or independent contractor, it is important to have total confidence in their references. 

Contractors are likely to have similar access to your company as an employee. They can also be hired for specialist work that is likely to be costly, which is why it is fundamental that you hire the right person or people for the job, those that are trusted and reputable.

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