It can get exhausting wearing all…the…hats…
You might hire an independent contractor because it’s a skill you:
- don’t want to learn, like the law
- don’t like, like bookkeeping
- don’t have, like web design
When you add a team member that’s an expert (and runs their own business) they often go by the legal name of “independent contractor.”
This is a great way to add specific skills to your business. (That is as long as they are truly independent contractors.)
Enter your information below to grab a bundle with everything you need when hiring an independent contractor. Including a free workbook that will help you decide if they are employees or independent contractors!
NOTE: If you are hiring California-based independent contractors you might want to collect additional things! If you have them, make sure you check out the workshop in the artist’s Courtyard to help you decide what else you might need.
But even though they are independent contractors, doesn’t mean you get to avoid the legal red tape. Sadly, even though there is less with independent contractors, you don’t get to skip out on the legal stuff.
In fact, there are three things that you should collect every time you hire an independent contractor:
- basic business information
- W-9
- independent contractor agreement
Enter your information below to get instant access to a mini-workshop to help you hire an independent contractor. You’ll also get access to two checklists and a form!
#1: Basic business info
For each independent contractor, you should have some basic information about her business:
- business name
- if their business name is an FBN/DBA then their legal name
- phone number
- business address
- point of contact
- type of business (sole proprietor, partnership, LLC, or corporation)
Luckily, you should be able to get all this from the other two documents you’ll collect.
Enter your information below to grab a bundle with everything you need when hiring an independent contractor. Including a free PDF worksheet where you can collect this information!
#2: IRS form W-9
The first reason you should collect them is that getting them upfront saves you loads of time at the end of the year. While you are dealing with all the rest of the end of the year tax stuff, you won’t have to scramble to collect them. Instead, you can hand them all over to your accountant to prepare and file 1099-MISC forms as needed.
Besides saving you time, it also gives you much of their basic business information.
Finally, it can support that you are treating them like an independent contractor and not an employee. (Although this form isn’t a magic bullet to turn an employee into an independent contractor.)
Enter your information below to grab a bundle with everything you need when hiring an independent contractor. Including a fillable W-9 PDF from the IRS!
#3: Independent contractor agreement
The most important document you should have when you are hiring an independent contractor is a signed agreement. This agreement should online:
- scope of work
- payment schedule
- payment method
- deliverables schedule
- the process for dealing with changes in the scope
- that the person is an independent contractor and not an employee
- who owns the copyrights in the work created
- that they cannot disclose any sensitive information about your business, if appropriate
This contract doesn’t need to be long or full of legal jargon. Remember to have a valid contract you only need three things:
- offer
- acceptance of the offer (without any changes)
- exchange of things of value
You can form this kind of contract over email. But it’s often a good idea write it out and sign it.
Not because it won’t be legal without a signature. But because both of you will take the arrangement more seriously when you write it down and sign it. I love HelloSign for these types of agreements. (And nope, I’m not an affiliate; I love using their service.)
Enter your information below to grab a bundle with everything you need when hiring an independent contractor. Including a free checklist that will help you create your independent contractor agreement!
Keeping everything organized
The easiest way I’ve found to organize these documents is using nested folders. I start with a folder named “Independent Contractor Documents”.
Under that folder, I have a folder for each independent contractor. The name of each subfolder matches the independent contractor’s business name.
And within each subfolder, I have our three documents:
- her basic business information
- scanned copy of her signed W-9
- our independent contractor agreement
This way I know exactly where to look (and find) everything I need for my independent contractors.
Enter your information below to grab a bundle with everything you need when hiring an independent contractor. There is a:
- worksheet to decide if they are one
- independent contractor biz info worksheet
- IRS W-9
- contract creation checklist
NOTE: If you are hiring California-based independent contractors you might want to collect additional things! If you have them, make sure you check out the workshop in the artist’s Courtyard to help you decide what else you might need.
