How To Hire an Independent Contractor in 2023

11/09/2023 05:20 AM

Introduction

Are you looking for how to hire an independent contractor but unsure where to start? An independent contractor is a person who delivers contracted services to firms on their own behalf.

Independent contractors are not included in employee counts because they are not technically employed by the company. Also, their labor is often limited to a single project or assignment, they decide how to complete tasks, and they pay their own taxes and insurance premiums.

Here’s everything you need to know when hiring a contractor for your business.

What To Look For In An Independent Contractor

While hiring a contractor or freelancer might seem like less work than an employee, you need to pay more attention to their qualifications and proof of work.

Make sure the contractor you hire has the knowledge and experience to complete the work.
Assess their skills by looking at their portfolio of previous work. From how they organize their portfolio, you’ll get a better understanding of their niche areas and styles.
Verify their past performance through reference checks. Note that this is not common, but if you want to take extra steps, contact their past employers or clients to learn more.
Verify their tax identification number and independent contractor status.

Once preliminary checks are done, you can now draft a contract specifying the task list, pay rate, and the due date for the project.

How To Hire An Independent Contractor From Start To Finish

Define Your Needs: Clearly outline the project's goals, scope, and deliverables to understand what work must be done.
Create a Job Description: Write a comprehensive job description (JD) for the position, including contact information for applications.
Candidate Selection: Review candidates' portfolios and credentials to narrow down the pool of available contractors.
Reference Checks: Verify references to assess the candidate's competence and professionalism.
Legal Assistance: If this is your first time hiring a contractor, consider seeking legal assistance to draft a fair-term independent contract that complies with local legislation regarding wages and taxes.

Extra Legal Notes:

If you’re from the US, here are some things to keep in mind when drafting your independent contract:

Form W-9: Request your contractor to complete Form W-9 (or Form W8-BEN for international contractors) to verify their name, address, and Taxpayer Identification Number (TIN), which can be their Social Security Number or EIN. Keep it on file for four years and ensure they exempt themselves from withholding taxes.
Form 1099-NEC: If you've paid your contractor at least $600 this year, didn't use a third-party payment platform, and they didn't indicate S corp or C corp status in box 3 of their W-9, complete Form 1099-NEC. This form reports their earnings and is essential for tax purposes for both you and your contractor.

Tax and Onboarding: Prepare tax collection information and onboarding materials, such as company processes, policies, and resources.
Supervision: Closely supervise the contractor's progress and offer suggestions as they work on the project.
Payment: Once the project is finished, proceed with all payments as agreed upon and keep all invoices.
Pricing: Independent contractor rates vary based on factors like project scope and expertise. Clearly state payment terms in the contract.
Timeline: The time to hire a contractor depends on project urgency and availability in the market. It can range from days to months.

FAQs

How much should I expect to pay for the services of an independent contractor?

Independent contractors' rates fluctuate based on a number of factors, including the scope of the project, the individual's level of expertise, and current market conditions. Other information such as payment, often represented by hourly rates or costs per job, must be clearly stated in the contracts.

How long does it typically take to bring on a freelance worker?

It relies on how urgent your project is and how many independent workers are available on the market. There is no close guess as to how long a competent, fit-for-the-job contractor will be available. It may be a few days, weeks, or even months.

How To Hire An Independent Contractor: Aniday Solution

Hiring an independent contractor requires attention to detail and legal compliance to create a mutually beneficial relationship.

We understand that independent contractors might be hard to find. That’s why headhunting sites like Aniday have been paving the way for bringing talented contractors to the jobs.

With 10K+ headhunters and 10M+ talent connections over the world, Aniday cuts short your hiring process, helps you save up to 3x the costs, while making sure you stay alert for the best-fitting candidates. Give Aniday for employers a try!