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Required Documentation for Independent Contractors - Checklist

Author: Christine P. Corrigan

Hiring independent contractors can save an employer from having to provide costly benefits and provide staffing flexibility to address temporary projects or demands. However, misclassification of workers may result in significant liability to the employer if a federal or state agency audit or a lawsuit challenging workers' status occurs.

To limit the risk of reclassification, the employer should perform due diligence on the independent contractor to confirm that the independent contractor runs a real business and is not an employee in disguise. Genuine independent contractors should be able to demonstrate that they operate a business by providing the employer with basic documentation. Once hired, the employer should provide additional documentation to the independent contractor.