When you need to replace an employee or need someone to fill up a position fast, you turn your attention toward securing an independent contractor. Independent contractors do not count as employees, meaning specific federal and state employment laws and payroll taxes do not concern to them.
Keep in mind that as an employer, you need to classify the worker as an independent contractor accurately, as failure to identify them correctly can lead to severe repercussions. If your small business does not require traditional workers, you can opt for independent contractors. To maintain a flawless working relationship with an independent contractor, you need to create a successful arrangement between the two of you.

The Role of an Independent Contractor

As mentioned previously, independent contractors are self-employed, meaning they do not report to a higher authority. You do not have to provide them with any benefits or payroll taxes, as you are not responsible for them. Their special license, experience, and special training or education required for a certain job influences their performance.

When you contract them, you need to provide them with the project’s outline and its deadline.  After going over the project, they will provide you with the method they will use to accomplish it and their working schedule.
They will have others working for them and they will be their employees, not yours. They will allocate parts of the project to different people in their team to execute and complete before the deadline. You will pay the independent contractors a flat rate per unit completed job rate or per job.

Three Advantages of Hiring an Independent Contractor
The three advantages a business receives from hiring an independent contractor:
1. It allows them to hire people when they need it.
2. The independent contracts will not necessarily use your resources, but may work off-site and use their own resources.
3. You will not have to worry about payroll taxes or employment laws even if they work on-site.

In fact, most consultants advise business to hire independent contractors to perform business functions not directly associated with its core services or products.  For instance, most white-collar businesses hire independent contractors to perform food service tasks or building maintenance jobs.

Furthermore, you can hire them to complete a special project with a short completion date. If you are thinking of hiring an independent contractor for a job, you need to ensure you create a successful independent contractor arrangement.

How to Create a Successful Independent Contractor Arrangement

The independent contractor agreement you create for the independent contractor sign should consist of information clearly indicating that an independent contractor is not an employee of the company.
To create a successful relationship with your independent contractor, you need to include the following things in the agreement:

1. Titles and Names
The contractor agreement needs to state clearly the status of the person as an independent contractor.

2. Training and Information Distinction
An employee complies with the instructions an employer provides to them. The instructions inform the employee about where, when, and how to perform the task. To further an employee’s skill, you train them.

Hence, you cannot classify them as independent contractors. You need to state clearly their role as independent contractors, listing their skills and on how they do not require supervision or additional supplies to perform the task.

3. Delegate Duties
Independent contractors cannot use employees working for the company to assist them perform work. If they require additional hands, they need to hire, supervise, and pay them out of their own pockets.

4. The Duration of Work
Even though there is not an established limit to contract duration, professionals recommend having a shorter contract duration. For instance, 20-year duration will not place them in the independent contractor category. Specifying hours for them to work will not earn them an independent contractor status either. You need to give them the authority to make their own work schedules.

5. The Deadline
You should not opt for an exclusivity agreement, as it does not give an individual the status of an independent contractor. Instead, you need to establish a deadline for the independent contractor, informing them that you need to complete a project by a specified time.

5. Place of Work
Do not tell the independent contractor where they need to work, but allow them with the option to work both on and off the premises.

6. Salary
The independent contractor arrangement needs to consist of how you will pay the independent contractor. Unlike an employee, you will not be paying by the hour, week, or month. Instead, you will be paying them a fixed rate. In addition to this, you need to avoid paying reimbursements for operating costs.

7. Equipment
When an individual provides and uses their own tools, supplies, and equipment, you can safely identify them as an independent contractor. They will purchase supplies required to accomplish a job using their own money.

8. Advertising
The arrangement should give the independent contractor the right to advertise their services to other companies in need of their services. If they are not able to work for other companies, people view them as an employee than an independent contractor.

9. Termination
The arrangement needs to contain a detailed termination clause. The independent contractor cannot terminate the agreement and if they do, they will face a penalty. You will pay them after they complete a project.

In order to let go of the independent contractor, you need to specify valid reasons for terminating them. You cannot not say you do not like the color and fire them. Instead, you need to state missed deadlines and the low quality of work as the reasons to end the contract.

In order to maintain a good working relationship with the independent contractor, you need to make sure you create a successful independent contractor arrangement.