The use of temporary workers is growing in the United States, now representing 22% of the total workforce. Temporary workers are referred to as freelancers, non-employees, indirect workers, agency contractors, consultants, interns, independent contractors, and many other terms.
3. COMPLYING WITH REGULATIONS FOR TEMPORARY WORKERS
Do’s & Don’ts When Using Independent Contractors
WHITEPAPER
Have the Purchasing department drive the selection
process
Issue a Request for Quote (RFQ) and have potential
independent contractors submit bids
Require copy of business or professional license, copy
of insurance certificates, copies of the independent
contractor’s advertising, and copy of the contractor’s
business card and stationery
Require the contractor to complete a W-9
Establish a written Statement of Work specifying scope
of work for a specific duration. Include appropriate
indemnity, attorneys’ fees, and liability clauses
Pay pre-negotiated fees for tasks or projects
Require the contractor to supply his or her own workers’
compensation insurance
Retain records of all transactions with the contractor, such
as contractor’s invoices for billing
Require the contractor to supply his or her own equipment
and tools
Provide training specific to job or company procedures
Periodically review contract compliance
Require independent contractors to show evidence that
they are serving other clients
Retain W-9 for four years for future reference in case of any
questions from the worker or the IRS
Have Human Resources or Line Managers drive the
selection process
Ask the independent contractor to complete an
employment application
Allow independent contractors to enroll in any
company-sponsored benefit plans
Require the contractor to complete a I-9
Have contractors perform similar work of employees
or perform routine work
Pay by the hour, week or month unless a flat fee is
agreed to be paid at regular intervals
Pay independent contractors from a payroll account
Pay contractors for any company holiday
Pay contractor expenses
Provide an employee handbook or offer continuing
education training
Conduct performance evaluations similar to
employee evaluations
Transition employees to independent contractors,
especially if the work remains largely the same
Retain unneeded records that have met the four-year
retention requirement unless parties are involved in a
dispute that has not yet been reconciled
DO’S DONT’S