Independent ContractorTalking Points

Overview

There are a variety of ways in which individuals may be engaged to provide services to our organization and our customers. Some are more common than others and each has its own advantages and disadvantages. So, it is important that we use the appropriate type of engagement and that we fully understand the ramifications of that choice.

Independent contractors are not our employees. We engage them by contract to perform specific services on our behalf for a limited period of time. Their responsibilities to us – and our obligations to them – are described in a formal written agreement or contract. It may be helpful to think of our independent contractors as you would a plumber or electrician hired to work in your home. The contractor is assumed to be competent to perform the services for which he, or she, is engaged and, if not, you simply replace the contractor.

Our independent contractors may not fully understand the nature of their relationship, and may question or violate tenets of their contract. Usually, such issues may only be addressed by a qualified attorney. So, if a contractor questions contract language or asks if a certain activity is permitted under the agreement, both parties should seek separate legal advice.

Our risk, therefore, comes largely from changing the terms of the contract or inadvertently acting outside the contract’s terms as when we treat an independent contractor like an employee.

Guidelines

1. Selection and Engagement – We are generally free to qualify and select those individuals who appear to have the experience and skills to perform contract services.

2. Training and Coaching – If we only engage contractors we believed have the necessary skills to do the job, little training or coaching is necessary.

3. Performance Appraisal and Discipline – Again, if we select the right people, few performance or discipline issues should arise over the brief period of engagement. If they do, you should immediately contact human resources or the legal department.

The challenge, then, is to achieve the desired results without treating contractors the same way we would treat an employee in a comparable role. For example, we can:

Establish and communicate goals and monitor progress toward those goals

Suggest alternative strategies to meet established goals

Tom Davies, SPHR, CCP 1

Require contractors to meet qualitative work standards and quantitative production levels, and to fulfill reporting requirements

However, we should not:

Train a contractor who does not possess the basic skills required

Criticize mistakes or otherwise appraise performance

Warn of consequences if performance does not improve

Promise or suggest the possibility of continued employment under any circumstances

Correct behavior such as insubordination, negligence or other disciplinary problems

As ever, if you have any questions, please contact human resources or our legal department.

Tom Davies, SPHR, CCP 2