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August 24, 2020

5 Things You Need to Know Before Hiring an Independent Contractor

5 Things You Need to know Before Hiring an Independent Contractor

Hiring an independent contractor is a big step. It often means that your business is growing and that you are ready to take the next step to bigger and better things. Now that you’ve found the right person and agreed on a scope of work, it’s time to roll up your virtual sleeves and get to work, right?

Not so fast.

While the paperwork required to hire a contractor is much less than a regular employee, there are still important documents that must be completed and collected. Here’s an overview of the who, what, why, where, and how of forms needed when you hire an independent contractor. 

 

Who Qualifies as an Independent Contractor

Let’s start with the who. Any person or business you hire to do work on your behalf, but not as an employee is an independent contractor. 

Usually, independent contractors are in a different business than your own. For example, freelancers like artists, editors and writers are often independent contractors. Independent contractors can also include outside companies doing work for you on an ongoing basis. Think cleaning service, an attorney, or a tax prep person. Basically, independent contractors include anyone you are paying for services and who is not an employee.

The Internal Revenue Service (IRS) has set guidelines for determining if someone is an employee or an independent contractor. As a rule of thumb:

  • You pay independent contractors for the result of their work. 
  • You pay employees for the ability to control how the work is done.

 

Why Independent Contractor Status Matters

When you hire an independent contractor, you aren’t required to withhold federal or state taxes or Social Security and Medicare taxes (collectively known as payroll taxes) from their pay. That’s because rather than paying them a salary or a wage, your business is paying another business for services.

Independent contractors are self-employed/owners of their own business and are responsible for reporting their income and paying the associated taxes. (You can learn more from irs.gov.)

When you hire people as employees, you are responsible for withholding the appropriate payroll taxes. This applies for part-time, full-time, and seasonal employees.

 

When to Call the Pros

Issues around employment status and taxes can be thorny.  The IRS offers some guidelines for making this determination. But, it’s wise to consult an attorney or accountant with specific questions or for advice when hiring people or businesses to do work on your behalf. While this article is a good overview of your obligations when hiring independent contractors, we aren’t attorneys and we don’t practice law here at HireMyMom.com. 

 

Start a File for Each Contractor

Before we talk about which forms to collect from your contractor and when, let’s take a step back and consider why it’s important to collect them. While you aren’t required to share information about your independent contractors with the IRS, there are still good reasons for keeping a file on each contractor. 

  • Maintaining project overviews and any feedback you share with the contractor, helps you keep good records about your projects– including how and when they were completed, who did the work, and what you paid to have the work done.
  • If you are ever audited, you can easily pull information about each contractor to share, as needed. 
  • Keeping a contractor file makes it easier for you to connect with contractors in the future. 

 

Collecting the Right Forms

Collecting the correct forms from independent contractors is often an overlooked step that offers important benefits for your business and the contractor you are hiring. Securing the correct forms at the beginning of your relationship can set you up for greater success later. It’s easier to have the information on file before the project begins when you and your contractor are in more constant communication. 

Collecting the forms early gives you peace of mind that you’ve checked all the boxes with your independent contractor.  According to The Balance Small Business, there are several forms to collect and keep on file, including: 

  • A completed W-9 tax form. This form and directions to complete it are both available online at irs.gov and should be on file before you pay the contractor. Once you collect the W-9 form, hold on to it for your files in case you need to share it with an auditor. (You don’t need to send it to the IRS.)
    • While you don’t need to withhold payroll taxes from an independent contractor, you are responsible for issuing them at 1099 Form for Non-Employee Compensation at the end of each calendar year. 
    • Independent contractors use the 1099 Form to report their business income to the IRS.  
  • A contract. When you start a new relationship with an independent contractor, establish the terms of your engagement with a written contract. The contact should:
    • Outline that the person you are hiring is an independent contractor and not an employee. It’s important that the person you are hiring understands that you will not be withholding payroll taxes because he/she is not an employee.
    • Stipulate who owns the finished work product. (This is especially important for creative services such as art work or design.)
    • Outline the scope of work to be performed.
    • Document billing rates, invoicing, payment processing and timing. Settling on this at the beginning of the project can make for a more productive relationship.
  • A resume and reference information. You know why you hired this person to do work on your behalf, but keeping a resume and reference information on file makes it easier for others to review, if needed. You may even have your contractors complete an application so you can easily access pertinent information about them in the future.

 

Additional Forms to Consider

In addition to the items outlined above, your business may dictate the need for additional forms, according to The Balance Small Business. For example:

  • A non-disclosure agreement (NDA). Sometimes called a confidentiality agreement, this gives you confidence that your independent contractor is not sharing your business plans or trade secrets with competitors or other businesses. 
  • A non-compete agreement puts restrictions on the contractor’s ability to take your customers or clients to a competitor. These documents tend to outline specific actions and timeframes where the restrictions apply.  
  • A non-solicitation agreement keeps an independent contractor from working for your competition while also doing work for you. This can be tricky because sometimes you want a contractor with expertise in your industry, which means he/she also works for other similar businesses.

Consult a lawyer if you are considering asking your contractor to sign any of these items. State laws vary considerably. Working with an attorney can help make sure that any steps you’re considering are legal and advisable based on your state, objectives, and situation.

 

We’d Love to Hear From You

Tell us how you found your independent contractor and the success you experienced.

 

 

Disclaimer. The information contained in this site is provided for informational purposes only, and should not be construed as legal advice on any subject matter. You should not act or refrain from acting on the basis of any content included in this site without seeking legal or other professional advice.

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August 10, 2020

How to Hire the Best Candidates for Your Remote Team

There’s nothing better than landing a great new team member-especially a remote team member. It’s a sign that your business is growing and you are ready to support additional people to help you get to the next phase.

But, finding that person is often easier said than done. And the stakes are high. According to a recent article on business.com, a bad hire can cost your business up to 30 percent of that person’s first year’s pay. More, if you factor in the time and expense that went into finding, onboarding, and training that person. If the bad hire hurt team morale or caused you to lose a customer, the costs can quickly grow.

While those numbers can be scary, take heart–it is possible to find and hire the right person. But, like most things in life, it’s easier to do it when you have a well-thought out plan and understand the common pitfalls that can lead to making a poor choice. 

 

Search Your Own Heart Before You Search for Candidates

A key ingredient in successfully finding the right candidate is understanding exactly what you want this person to do. This is easier to do before you start searching for a candidate and is best accomplished by writing a job description. To get started, consider:

  • The goals for the role. A year after you’ve hired this person, how will you measure his/her success? For example, do you want to see sales increase by ten percent? Improve retention rates? Increase your social media presence? Maybe it’s important that this person fits in well with an existing team or brings new ideas to your business. Whatever the goal is, think of it in terms of an evaluative measure that can be used to assess success.
  • The skills and background needed to successfully do the job. Thinking about the objectives for the new role, consider the skills and background that will help a candidate succeed. 
    • If you have people already in this role, get their thoughts on the right background and compare them to your own ideas.
    • Look at similar roles both within and outside your business and see what skills and backgrounds others are asking for in the role. 
  • The things that matter to your team. Do you have a team of night owls who are looking for a morning person to help balance them out or take customer calls earlier in the day? Maybe you have a team of project managers who would love to have someone with sharper design skills join the group. Thinking about the dynamics of your team and organization can make it easier to know more about who you are looking for when you start your search.
  • What “remote team member” means to you. Do you want someone to work set hours or are you more of a core hours shop? If so, what are the core hours? Are you open to someone located in a different time zone? Do you prefer someone who can personally meet with you for an occasional lunch or team meeting? If you have preferences in this area, be sure to make note of them at this stage.
  • Know what you value in this position. Are you looking for integrity, efficiency, intelligence? Maybe you want  someone who is proactive, a team player, organized, attentive to detail, and  handles correction well. Whatever the traits are that matter to you, identify and document them as part of this process.

 

Write a Job Description

Now that the ideas are churning in your mind, sit down and write a formal job description. You may want to include:

  • A functional and descriptive job title.
  • An overview of the job’s responsibilities.
  • Goals for the role.
  • The skills and background required to succeed.
  • Any specific hardware or software skills.
  • Information about why the job matters to your company.
  • Pertinent details about how you expect the remote work relationship to work. 

 

Share Your Thoughts

Once you have a draft, share it with others who know about the job or will be working with this person. Discuss the job until you get to the heart of what you want. Be specific. 

Continue to revise the job description until it really fits your needs and you have agreement that it captures what you’re looking to achieve by adding this role.

 

Create a Plan to Find the Right Person

When you are looking for a remote team member, you have the important advantage of not being limited by geography. You can find and hire a team member who’s located anywhere with good internet access. 

Using a platform like HireMyMom.com is a great way to source qualified candidates who are specifically looking for remote work. You can save time and money by turning to a site dedicated to connecting driven mom professionals with small businesses. 

If the prospect of a nationwide search daunts you, consider our concierge service to help reduce the amount of leg work you need to do. HireMyMom’s Concierge service was created for busy entrepreneurs and small business owners, like you, who need to hire help but don’t have the time or desire to go through the time-consuming process. With our full service Concierge service, our HR Specialists will do it all for you start to finish and present you with the top candidate(s). 

 

Prepare to Interview Candidates

With candidates identified, it’s time to develop initial interview questions before the first interview. What are some questions that would help you spot those who do and don’t have those skills or qualities?

In the Book, “Who” by Geoff Smart and Randy Street, they outline a thorough process for hiring “A” players. The process may be overkill for some smaller remote roles but the basics of the process provide a solid foundation for selecting the right candidate. 

The interview questions Smart and Street recommend are easy and conversational. They recommend an initial phone interview asking the following questions:

  1. What are your career goals?
  2. What are you really good at professionally?
  3. What are you not good at or interested in doing professionally?
  4. Who were your last five bosses and how would they rate your performance on a 1-10 scale when we talk to them?

Each of those questions should be followed up with “tell me more”, “how” and/or “what” to dig deeper to gain more insight about the candidate and their performance, work ethic and skill level. 

Once you’ve discovered who passed your first interview, Smart and Street recommend the “Who Interview” which “is designed to give you more confidence in your selection because it uncovers the patterns of somebody’s career history and is a chronological walkthrough of a person’s career.” They recommend walking through their past five jobs and asking:

  1. What were you hired to do? How was your success measured in that role?
  2. What accomplishments are you most proud of? Be listening for correlations relating to the expectations of your job. 
  3. What were some low points during that job? Or what part of the job did you not like? In what way were peers stronger than you?
  4. Who were the people you worked with? Ask specifically for the boss’ name. Ask what that person will say were their biggest strengths and areas for improvement. That lets them know you will be calling and they are more likely to give you an accurate response. 
  5. Why did you leave that job? Dig deeper into their response with more questions to more fully understand. 

 

The Reference Checks

The last step of the selection process is to check the candidates references. This will be an opportunity to see what others think of them. You may want to ask them some of the same questions from above to see how similar their responses are. 

Taking the time to get a more full and complete picture of someone’s work history, personality, strengths and weaknesses will help you determine who is the best match for your role. Knowing what you want and what your goals are will help guide you in the interview process. The rest will be determined by the answers you receive!

 

Avoid Common Pitfalls

With all the work you’ve done so far, you are likely sailing toward the right pick for your opening. Still, beware of these common pitfalls:

  • Short changing the thought process to determine exactly what you are looking for or needing from this role. 
  • Limiting the job description so that it includes only skills needed or tasks to be accomplished. It does not include the goals and outcomes for the role.
  • Conducting  interviews that are too are short and do not give you an accurate representation of the candidate. 

 

Enjoy the Process!

Hiring the right candidate with the right skills for the right job can dramatically impact your company’s productivity, outcomes and goals. Your biggest asset is usually those you place on your team. They can help you succeed or they can hold you back. Embrace the opportunity and the process to find the right fit.

 

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December 16, 2019

10 Qualities To Look For When Hiring a Remote Contractor or Team Member

The world has gone digital and as an Entrepreneur, you now have the ability to put your products and services in front of the right people across many digital channels.

This means, that your business could grow substantially overnight. If you’re not prepared for that growth, you’ll find yourself completely overwhelmed with the many day to day tasks required to operate and maintain your company.

Que the rise of remote contractors.

What is a remote contractor?

Just as the name describes, this person works from their own office space (often out of their home) and uses their own equipment and software.

 

Why consider hiring a remote contractor?

  • They can start immediately
  • Require very little training
  • Have little to no onboarding costs
  • Are more productive and
  • Can save you time

When deciding on “how” you want to expand your business, you should focus on filling the voids of your company. 

What does that mean?

Well, if you carefully assess all the tasks you’re doing right now and break them down by priority, the ability to do them yourself, and whether you like doing them – you’ll soon have a vision for your new hire.

Whether you’re hiring a bookkeeper, marketer, content writer, or assistant, here are some common traits you should consider when hiring a remote worker.

 

10 Qualities To Look For When Hiring Remote Team Members

 

1.  Strong Communication Skills

Communication is key to any successful working relationship. It’s especially important for a remote employee-employer relationship because most of your conversations will be taking place through text, phone, email, and/or video chat. You should also keep in mind, the time zone your remote worker lives in, their first language, and their response time when you communicate with them.

Because a remote employee can’t just walk into your office to ask for help whenever a situation arises and vice versa, you have to be able to effectively communicate. Without this core competency, it’s impossible to succeed with a remote employee. 

 

2. Independent and Self Motivated

The last thing you want to be doing is micromanaging your remote worker. He or she should be independent, self-motivated, and be able to complete most tasks assigned with very little direction (unless the task requires it).

Successful remote workers must be able to motivate themselves to stay focused with little distraction seeing each task from start to completion.

Because you can’t be there in person to ensure your remote worker is staying on task, independence and self-motivation are must-have qualities when finding the best fit for your organization.

 

3. Flexibility and Availability

A huge benefit for a remote employee is the flexibility of the job. For remote employees who are parents, this means they can drop off and pick up the kids from school, attend soccer games, school plays and more.

Just as flexibility is a benefit to the remote worker, the remote worker should be flexible with you, the employer.

Your remote worker should be flexible with your schedule and also available when you need them. If they are not a designated remote worker, they should be able to attend necessary meetings and communicate with you in a reasonable time frame with proper notice.

If you run a business that has a lot of tight deadlines, consider a designated, full-time remote worker over a freelance part-time one.

 

4. Ability to Organize and Prioritize

Strong organizational skills are extremely important for a successful working relationship with a remote employee.

They should be able to take a list of tasks given, organize, and prioritize them with minimal direction and be able to carry out this task on a continuous basis.

If your business uses a Project Management software, your remote employee should be able to navigate through it with ease. If they have experience using the software, it’s even better as there’s less of a learning curve if at all.

 

5. Tech Savvy

Because the world has gone digital, your remote employee should be tech-savvy, especially since their work is done on a virtual level.

Your remote worker should be fluent in common software applications such as Microsoft Office and Google Docs.

Because your remote employee will be performing many of the day-to-day tasks on a shared software they should have a good understanding of how to use it. If training is needed, they should be able to learn the software from you personally, YouTube or other online training.

 

6. Excellent Time Management Skills

Effective time management is fundamental to the success of any business. When you hire someone with excellent time management skills, they will be able to complete more tasks for you in less time which translates to saving you money.

Remote workers with great time management skills will create and maintain daily to-do tasks, they have designated workspaces so they can perform their work with minimal distraction and will find ways to optimize their time on the tasks they are given – including learning new software applications.

 

7. Honest and Reliable

Remote work requires a level of trust between yourself and your remote employee. You will likely be giving them access to your software, email inbox, website, and more.

It’s important to properly interview and screen your candidate before you hire him/her and depending on the nature of your business, a background check might be needed as well.

An honest and reliable remote worker will tell you when they don’t understand something, they will be honest if they make a mistake so it can be corrected quickly with minimal negative impact to the company.

They operate themselves with the highest level of integrity which is reflected in the work they do for you.

 

8. Remote Experience

It’s important to select a remote worker with experience. They should have a designated workspace, their own reliable technology to work on, the key software programs such as Microsoft Office as well as anti-virus protection to keep their computer (and your sensitive information) safe.

Remote workers with experience are also ideal because there is less transition and training required when it comes to onboarding them.

 

9. Administrative Experience

One of the most in-demand types of remote workers for small businesses are Virtual Assistants (also known as VA’s).

You can incorporate virtual assistant duties into almost any role. Often there is an overlap in VA tasks whether you’re hiring someone to help manage your social media, conduct bookkeeping or maintain your website.

Some common VA tasks include: 

  • answering emails,
  • entering invoices,
  • managing calendars / setting appointments,
  • research,
  • updating blogs,
  • customer service,
  • travel arrangements,
  • answering phone calls.

 

10. Positive Attitude

Sometimes it’s not the talent but the attitude of a worker that helps you determine whether or not they would be a good fit.

A remote employee who has a positive outlook will provide you with higher work quality than one who is negative.

They will take any constructive feedback you provide in a positive light and not become defensive or offended. This, in turn, leads to a continuous improvement of work quality and flow.

 

As the small business community continues to grow, the demand for remote workers does too! At HireMyMom, we have a large selection of remote workers to choose from. The benefits of our workers are that they are often in similar time zones, speak fluent English, and are typically work-ready within 24-48 hours of you hiring them.

We hope you’ve found this article helpful. We have another great article that you might like called “ 7 Reasons Why Moms Make The Best Remote Workers For Small Businesses”. 

If you’re ready to get started with a remote employee, you can post your job here. If you need to hire but are overwhelmed at the task, consider using our VIP Small Business Concierge program and allow one of our HR Specialists do all the work for you! 

 

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January 14, 2014 0 Comments

Challenging Times Call for Creative Hiring Solutions

In today’s economy, many businesses are having to downsize and cut back expenses every place possible in order to survive. This includes letting valued employees go – often times with much regret. And unfortunately some believe our economy will not improve for a couple of years. So what are businesses to do? How do you support and grow a business if your employee pool is or will be dwindling? Are there creative hiring solutions?

Outsourcing is a Creative Hiring Solution

The good news is that many businesses are finding a perfect solution in outsourcing to independent professionals. These professionals offer the same skills and experience as an on-site employee yet they work as an independent, not requiring employee benefits or office space. One of the largest pools of independent professionals is mom professionals who have left the workforce voluntarily or involuntarily.

Many of them are looking for ways especially now to help supplement their families’ income. And in some cases support their family altogether if their spouse has been laid off. These professionals are experienced and educated but are seeking the freedom and flexibility to work hours that are more conducive to having a family. Some of them work part time and some work full time. Some of them work on an hourly basis and others work on a salary or by the project. What’s great for them and for the company is that studies have proven that a person’s productivity actually goes up when working from a home office. This is at least partly due to the fact that independent workers want to prove themselves and go above and beyond expectations to ensure the work keeps flowing to them.

A Win-Win Solutions

The beauty of it is that these creative hiring solutions is a win-win for the company and the professional. In the majority of cases the company saves on payroll and employee benefits and the professional is pleased to have flexible work and puts forth his or her best effort to make sure the work keeps coming in. For more information on hiring at home professionals, visit www.HireMyMom.com.

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Lesley Pyle is the founder and president of HBWM.com Inc. which includes the national association of Home-Based Working Moms helping moms network, learn and grow in their role as a Home-Based Working Mom and HireMyMom.com connecting at-home Mom Professionals with home-based jobs and projects in virtually every career field.  Pyle has been featured in numerous publications including Forbes, Entrepreneur, Wall Street Journal, USA Today, Home Office Computing, and many others.  Twitter @lesleypyle and @hiremymom

Check out these other great articles about tips for mom as a work from home professional.Also check out our current job postings for mom professionals.

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