Some Dos and Don'ts When Working with Contract Employees

When your small business is starting to grow and you’re thinking about hiring some help, it can be a difficult transition to make that brings many questions you need to ask. Do you hire a full-time or contract employee? What’s the difference? Where do we expect this to go? How much work do we have for them? Can we financially support it?

There are pros and cons for whichever route you choose to go, but if you do choose to go down the contract employee path there are several things that you need to keep in mind along the way. Here are some simple Dos and Don’ts to consider.

DO: Find a partner to guide you to experienced and capable contractors.

If it’s your first time trying to locate a good contractor, it helps to have an experienced partner at your side. A good partner has been down this road before and can connect with numerous qualified contractors they have already vetted that can help you get your job done. They should have the processes in place to get them to work quickly. 

DON’T: Treat them like anything other than a full-time employee.

Once you’ve picked a good contractor, it’s important to get them into the fold like any other employee. Although they aren’t a typical employee, they are going to be working for you all the same and including them into the culture of your company is important. Building teamwork between them and any other employees will help things run smoothly.

DO: Pay your contractors on time.

Whatever arrangement you made at the beginning of their contract, stick to it. Make sure they are getting paid on time every pay period. Independent contractors must take care of everything on their own – taxes, benefits, days off, etc. Any gap in getting paid could have major consequences for them. It can have major consequences for you too, as there’s no better way to chase a good contractor away.

DON’T: Misclassify your contractors.

It’s not uncommon. If you accidentally misclassify a full-time employee as a contractor, it could cost you big bucks. The IRS doesn’t formally define “independent contractor” and instead uses a series of factors to evaluate employment status. Although it’s important to treat contractors like employees when it comes to culture and team building, you can’t treat them like employees when they aren’t receiving benefits and you’re not paying their Social Security and Medicare tax obligations. Make sure you know those factors.

Do: Keep contractors in the loop.

Many times, you’ll have contractors that work remotely and you can accidentally forget about them. Any major changes to a project or happenings on the team need to be communicated to them. Having regular and frequent contact appointments with contractors helps to avoid mishaps, lost time and work, and keeps them both engaged and accountable.

There are a lot of moving parts and things to think about when you’re working with independent contractors. Respecting them like full-time employees and keeping the lines of communication open will not only impact your bottom line but encourage them to work with you again in the future!

Cynde Cronin

Cynde has been with Aureon HR since 1999, working in several sales roles. Currently, she is the Vice President of Business Development and works with small businesses and non-profit organizations. She is the current president of the Chrysalis Foundation, a member of NAWBO (National Association of Women Business Owners), and a member of the United Way Women's Leadership Conference. She holds an Associate of Arts Degree from Des Moines Area Community College. In her free time, Cynde enjoys spending time with her grandchildren, her husband, and volunteering at the Animal Rescue League, Foodbank of Iowa, The Greater Des Moines Botanical Garden, and many other projects around her home of Adel.

Published

November 20, 2018

Posted by

Cynde Cronin

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