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5 Questions to Ask Yourself before Hiring Independent Contractors


Hiring independent contractors is a tricky decision. Independent contractors work under minimal supervision and often telecommute, meaning that you may never actually meet your contractor face-to-face. Prior to hiring an independent contractor, consider the following 5 issues.

1. How Much You Can Afford

Before advertising for or hiring an independent contractor, you need to determine how much you can afford to pay for her services. Research how much an independent contractor in the field you seek help in typically earns. Then, take a close look at your business finances to see what amount and for how long you can pay the average rate. You may find that your budget may not support hiring a contractor.

2. What You Need Done

To determine whether you need to hire a contractor and, if so, what requirements you have for the contractor, you must consider the job's specifics. Develop a reasonable estimate for the length of time and number of hours you expect the job to require. If the job is full-time and quite complex, you might need to pay a contractor more than the average rate. Also, if the job will require full-time work over an extremely long period of time, you may want to consider hiring an employee because you may be able to pay a lower salary if you promise full-time employment.

3. What You Expect from the Contractor

After you've identified the specifications of the project and how long you anticipate it taking, analyze what you expect from the independent contractor and whether they are reasonable. If your project is to develop an entire website for your business in a month, you may need to reevaluate the possibility of that actually happening. Additionally, identifying your expectations will help you to know whether you could do the job yourself and save the expense. If what you need is simple and within your expertise, and your expectations for a contractor to complete it are quite simple, you may be able to complete the job yourself.

4. How Responsible the Contractor Seems

After obtaining a few bids or applications for your position, you need to thoroughly analyze each to see how comfortable you feel with the contractor. The contractor's resume should show they are responsible and able to fulfill commitments.

5.  Possible Legalities

You should require any contractor you hire to sign an employment agreement that clearly states the amount of compensation for and length of time for the project. This agreement should also state how you plan on handling any tax obligations that arise from paying a contractor. If you pay a contractor more than a certain amount or for an extended period of time, you may need to report this income to the IRS. However, you may also state that you have no tax reporting responsibilities, but that the contractor is responsible for reporting and paying taxes, which is typical in an independent contractor employment agreement.

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