Hiring freelancers can be a cost-effective and efficient way to add talent to your team, but it’s important to do it in a compliant way to avoid legal and financial risks. We’ve outlined a few steps to make sure you hire freelancers compliantly.
Understand the laws and regulations: Familiarise yourself with federal and state laws regarding independent contractors and freelancers, including tax laws and labor laws. If you are hiring freelancers internationally make sure you do some research on local laws in the country your freelancer is working from.
Use a written contract: Clearly define the scope of work, the deliverables, the timeline, and the payment terms in a written contract.
Always check for proper documentation: Verify that the freelancer has the necessary documentation, such as a valid business license and tax identification number so that you can pay them correctly.
Classify them properly: Be sure to classify the freelancer as an independent contractor, not an employee, and provide them with the correct forms (For example a W9 form if you are in the US) to make sure you have all the correct details and information.
Avoid control: Avoid exerting control over how and when the freelancer does their work, as this could be seen as evidence of an employment relationship. Freelancers operate differently to employees in that they control how and when they do their work.
By following these steps, you can ensure that you are hiring freelancers in a compliant way and minimising your legal and financial risks. It can be daunting, which is why Workfree enables businesses to hire & scale freelance teams compliantly. You can save time and money by automating freelancer hiring, management, and payments.
See our tips on how to manage a flexible workforce effectively.