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How to Manage an Independent Contractor

Author: Christine P. Corrigan

Independent contractors offer an employer flexibility to meet staffing demands and expertise in areas outside of the employer's business. Like the employers that hire them, independent contractors run their own businesses, set their own schedules, balance conflicting demands and generally work in their own offices without direct supervision. Independent contractors are their own bosses; they are not employees. If an employer manages an independent contractor like an employee, it runs the risk that a governmental agency or a court could reclassify the independent contractors as an employee, resulting in significant financial liabilities.

To manage independent contractors effectively, an employer should set clear expectations about the project's scope, budget and timeline; keep the lines of communication open; and pay independent contractors promptly so that they will want to do business again. An employer should avoid actions that could result in a reclassification of the parties' relationship.

After hiring an independent contractor, an employer should consider following the steps set forth below to manage the independent contractor.