Sponsored for you by: David E. Gardner, CPA
Hiring an Independent Contractor
The Employer's Responsibility
Employers are obligated to ensure the workers they hire as Independant Contractor's (IC) truly are Independant Contractors. Obtain proof of their insurances. They must make sure their relationship with the IC is to achieve an end result as opposed to directing and controlling the way the work is done. A way to destroy a good hiring agent / IC relationship and turn it into an employer/employee relationship is for the hiring agent to exert or have the right to exert control over the worker.
When hiring an independant contractor:
* Have a written contract containing who, what, when, where, and how.
* Hire those who are experts at their work.
* Do not train or provide essential equipment or materials for the project.
* Do not pay on a time basis: for example by the hour.
* Ask for proof of General Liability Insurance.
* Ask for proof of ICEC and verify it is in good standing by looking on the web at www.mtcontractor.com or calling (406)444-9029.
* Obtain references and follow them up.
* Choose to hire only those who carry workers' compensation insurance on themselves.
Individuals who sign independent contractor agreements or who hold exemptions, may not be ICs in fact. The issuance of 1099s and lack of withholding taxes does not make an individual an independent contractor.