There are advantages with using contractors – you can create a contract to suit your business and the contractor handles the benefits and there is the added advantage that they usually are experienced so there is no need to provide employment training. However, there are a few issues to be aware of before using their services.
Clarify the position
Make sure that you make clear that the contractor is being hired and not being employed directly by the company. This can be an issue if someone does not pay their tax on a self employed basis. You also need to be sure that this is clarified in the event of a contract being terminated.
Check the paperwork
While a contract can clarify whether or not someone was employed by a company on a self employed basis this is not the sole aspect of the employment status of a contractor. Be sure to check any documentation to make sure that the contractor has been clarified.
This is vital as well because the documentation should also clarify the work that needs to be done and the timeframe it should be completed in.
Liability insurance
Check to make sure that the contractor has their own liability insurance so that they can cover themselves and their employees in the event of any injuries.
Check the details
Ideally a contractor should have an address and contact details. This may sound obvious but some self-employed people work from home and may not provide a central phone number. This is fine if everything works out but may prove problematic if something goes wrong and you can’t get hold of the contractor.
There should also be clarification in terms of how often the contractor will be at work as well as other services (cleanup etc). It may sound obvious but you need to make clear what is covered in terms of costs and what the contractor will be responsible for.
Be careful
Ultimately it is important to be aware of the contract you have between you and the contractor. Never pay the full amount upfront and never in cash. Make sure you are aware of who you are working with (including subcontractors) and any issues regarding liability insurance and the rights of the people you are employing on a self employed basis.
Using a contractor can provide a lot of benefits – giving you someone who can handle the costs involved with employing people. However, it is vital to be aware of your responsibilities with the contractor and to check over a contract before signing it.
If you have any concerns about this it is best to discuss this with an experienced legal professional. At Larcomes we have the advantage of having the resources to specialise while at the same time providing a close personal service.
There are a lot of potential issues – whether using the services of a contractor, if they have not performed the service they said they would or if you are unsure about the legality of a contract. If you want to discuss this in more detail contact our business legal specialists today.