What exactly is an Independent Contractor?
When we can’t do a job ourselves, we hire professionals to help us.
An independent contractor is an individual who runs their own business on a contractual basis. Also known as freelancers, these contractors attract their own clients, create their own schedule (and hours), invest in their own equipment or materials, and tend to their own finances, legal affairs and insurance.
Some common independent contractors include accountants, writers, hair stylists, carpenters, personal trainers, massage therapists, graphic designers, photographers, tutors, electricians, real estate agents and more.
You’ve probably worked with one or two of these freelancers in the past. Hiring a contractor can be very rewarding in that you receive a one-on-one personalized experience from a seasoned expert who is flexible to your needs. You may even get their services at a reduced rate because they don’t have the overhead of a larger corporation.
While the benefits of employing a contractor are seemingly endless, how you approach hiring a freelancer can directly affect the quality of service or product you receive.
Here are some dos and don’ts when hiring an independent contractor:
• Do your homework and research a quality contractor. Start by collecting referrals from friends, family or colleagues. If they can vouch for the contractor’s quality and cost, you can likely expect a similar experience.
• Do ensure they have the proper credentials for the job. Meaning, they are a master of their trade — whether it’s carpentry, graphic design or photography — and have the documentation to prove it. For instance, an accountant should be a CPA (Certified Public Account) and real estate agents should be licensed. Another indication of credibility would be if they are a member of a national association, such as a Writer’s Guild, National Association of Realtors or Home Builders’ Association. In other words, you want to know they are certified to help you and have the proper training and experience to do so.
• Do ask to see their past work if possible. With a photographer, you can view his or her past photos to see if their style matches your vision. Previous work is referred to as a contractor’s portfolio. A home builder’s portfolio would include the homes they have already built. Service based contractors, such as a massage therapist, might not have a tangible portfolio, but talking to past clients will supply valuable insight into their capabilities.
• Do meet them or conduct an interview over the phone. Talking to them face-to-face will give you a feel for their attitude, professionalism and work history.
• Do request a quote prior to having any work done, including how much and how long the project will be. Evaluate whether the price is reasonable. If it seems high or doesn’t fit your needs, shop around for other prospects.
• Do shop around. For a large project, such as building a home, try to get several bids from a couple of contractors to compare pricing and decide what is right for you and your budget.
• Do insist on signing an independent contractor agreement. This agreement outlines the details of their services, a payment schedule and compensation, duration of project, liability, ownership of materials, indemnification, insurance and more. Not only will a contract guide your working relationship by setting out the rules and responsibilities of each party, but in the event something goes awry, you can return to the agreement for reference. Be sure to specify confidentiality requirements, particularly if the nature of your business together involves the freelancer’s access to your private information.
• Do find someone you can trust and respect. A positive working relationship makes communicating with them much easier, especially if you will be working with them for an extended period of time or are entrusting them to sell your home, write your biography, file your taxes or photograph your wedding.
• Do show gratitude. If you are happy with the services provided, thank them and offer yourself as a referral for their next client.
• Don’t skip research. When looking for a good contractor, don’t settle for the first one you find. It’s likely if you dig a little deeper, you can find the best person for the job. You’ll know if the first prospect stands out once you have researched others to compare.
• Don’t hire anyone who asks for full payment upfront. Most service related industries, specifically freelancers, know that payment is generally issued after services are rendered. A deposit is acceptable.
• Don’t make oral agreements. While you may think you have an arrangement because you both “shook on it”, there is nothing legally guaranteeing the contractor will complete the project. Always protect yourself with a written agreement. A professional contractor will agree that written arrangements are in both party’s best interest. In most cases, the contractor will provide the contract. If a company hires a freelancer, they may be the ones supplying the agreement. Either way, don’t neglect the importance of documenting your arrangement.
• Don’t hesitate to speak up about something you don’t understand. While a contractor may be an expert in their field, that doesn’t mean you understand all the terminology they are using. This also applies to the contract. Review each page before signing to make sure the terms are agreeable. Feel free to ask them to explain conditions you don’t understand. It’s better to clarify all aspects of the job before work begins to avoid misunderstandings later.
• Don’t agree to “off the grid” deals. If something changes mid project, revise your agreement to reflect the adjustment. Don’t be forced into making fluky deals on the spot, such as advertising in exchange for cost reduction.
• Don’t rush the process. If you are hiring someone to do a big project, take the time to find the right person. Some of the best contractors are booked in advance for a reason. Don’t dismiss them because they are busy. You want the right candidate for the job, even if that means waiting until they become available.
Do you have any dos or don’ts to add? We’d love to hear about your experience in the comments below!