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Hiring Freelancers: What You Need to Know

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By Christopher Coble, Esq. on July 24, 2015 3:59 PM

With over 50 million freelancers out there, businesses would be foolish not to take advantage of their services. After all, not all jobs require a full-time employee.

As businesses and employees are getting more flexible and agile, you may find yourself in the market for freelancers. To make sure you hire the right way, keep a few things in mind:

Keep It Classy

Since freelancers are not permanent employees, they're classified as independent contractors. This classification can give employers several benefits, like avoiding Social Security, Medicare, and unemployment taxes.

But misclassification can get you into trouble. The IRS has been cracking down on employers for misclassifying full-time employees as independent contractors to skirt employment laws. So, if you have reliable freelancers, go ahead and re-use them for projects, but that guy putting in standard 40-hour week in a supervisory role is probably an employee, not a freelancer.

Get It in Writing

A good paper trail will keep your freelancers on track. Start with issuing your freelancer a 1099, as you would with any contractor. And do a little research on their paperwork as well -- a good freelancer will be incorporated themselves and be marketing to other clients. This kind of establishment can be indications of a freelancer's quality, as well as clarification that he or she is not an employee.

Have a contract with each freelancer that covers the exact work they will be doing. The contract can specify the limited nature of the project, but avoid control over hours, location of work, and other details that would scream "employee."

If you're worried about the legal issues of hiring and paying freelancers, you may want to consult with an experienced employment attorney today. And while it's necessary to have the freelancer send you invoices, you should avoid a weekly or monthly payment scheme that could resemble a salary rather than payment for a project.

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