Management
What You Should Know Before Hiring an Independent Contractor

Are you thinking of hiring independent contractors?
Hiring contractors is a budget-friendly way to help support your small business. They allow you to get your business done and grow your company, without the legal and financial hassle of bringing on full-time, salaried employees.
Freelancing is taking off as more and more people want freedom in their work schedules. So there is plenty of talent out there to help your business succeed.
But hiring an independent contractor can be tricky, so don’t make any offers before you do some research and know what you’re getting into. Keep reading to learn more about what you need to do before hiring an independent contractor.
Five Steps to Hiring an Independent Contractor
Independent contractors and freelancers can help your business thrive, but you shouldn’t hire just anyone. Certain forms need to be filled out, and there are unique rules when tax time comes around.
If you’re new to working with contractors, here are five steps you’ll need to take before bringing on independent contractors:
1. Always Check Credentials
There are a lot of great contractors out there, but make sure you always vet your candidates before you make any official offers. A lousy contractor could cause some legal trouble down the road.
Always ask for a copy of their resume and to see past examples of their work. You likely wouldn’t hire a full-time employee without meeting them, checking their references and making sure they’re legitimate.
2. Fill Out The Proper New Hire Paperwork
Just like full-time employees, contractors have paperwork that needs to be filled out before they can start legally working for your business. Make sure you have a W-9 form filled out for them. This form is the contractor’s equivalent to a W-4.
3. Make Sure You Sign a Contract
Before your contractor does any work for you, you should have some form of contract or work agreement in place. This will keep you safe legally and hopefully prevent any disputes like contract breach later on.
4. Paying the Contractor
Paying your independent contractor isn’t that complicated. You can either have them charge you hourly or agree on a flat rate per project. The exact price and method of payment should be agreed upon before the project starts and laid out explicitly in your contract that you both sign.
All you have to do is make sure that you accurately record every payment that you send to your contractors, and pay stubs is an easy way to do this.
5. Give Them Proper Tax Documents
If you pay your independent contractors more than $600 in a year, you’ll need to give them a 1099-MISC form and include the total amount that they were paid. They will need this form and information to file their taxes properly.
Learn More About Running a Small Business
Hiring an independent contractor or more might seem complicated, but it’s easy to do with a few simple steps like what we’ve mentioned in this article.
Growing a business is never a walk in the park. All startups need a lot of your time and resources. Using temporary staff will be the extra help that can smooth out operational requirements and keep your existing staff and customers satisfied. As the leader and owner, you can free up time to learn more about what makes a business a success and focus on what will grow your business.
Check out the rest of our website for more helpful business tips. We have articles ranging from finance to marketing and sales!