Be Prepared to Give Up Control
Enjoying the benefits of independent contractor status comes with a price — a true independent contractor is not your employee, and you cannot exercise the same degree of control over an independent contractor as you would over a bona fide employee.
As a result, you should not:
- set specific work hours
- address poor performance via employee discipline forms or similar documents;
- ask contractors to supervise your regular employees; or
- overly restrict your contractors’ ability to perform work for other businesses.
It is almost always a good move to require that your contractors incorporate or set up some other formal business entity.
This does not mean you have no say in terms of how and when the independent contractor performs their work.
Walk the Walk: Don’t Treat Independent Contractors Like Employees
While written agreements and policy documents are helpful, a company engaging independent contractors needs to ensure that its managers and other employees are aware of independent contractors’ status and do not treat such individuals the same as employees. For example:
- do not invite independent contractors to office holiday parties and similar events;
- do not provide employee benefits to your independent contractors;
- do not invite independent contractors to your employee training sessions; and
- require that independent contractors provide you with invoices for services performed (i.e., they should not be punching your time clock along with your regular workforce).