Augment your business by hiring independent contractors

Choosing our SaaS based PEO/EOR Solution enables you to build and manage 100% pure remote teams and expand into new markets 90% faster.


This is some text inside of a div block. This is some text inside of a div block.This is some text inside of a div block.This is some text inside of a div block.

Do you know that hiring independent contractors is a great cost-cutting measure? Do you want to hire international contractors to enhance your workforce? Are you aware of the benefits you would receive as an employer by hiring overseas contractors?

Who are independent contractors?

An independent contractor refers to a self-employed person or an entity providing professional services autonomously on the basis of a contract. These independent contractors work or provide their services for multiple external entities as a non-employee over a short-term or per project basis. As a result, the independent contractors who are otherwise known as freelancers are subjected to pay their own Social Security and Medicare taxes which voids the hiring firm from potential liabilities.

How to hire an independent contractor?

For hiring independent contractors who would serve as a long-term asset to the firm similar to that of an employee, every hiring manager is expected to follow a five-step strategy:

  • Stating the job roles and responsibilities precisely
  • Listing the job over the right websites
  • Interviewing, testing capabilities of contractors and checking references
  • Paying an industry standard wage
  • Signing a written contract or agreement pertaining to both the parties (i.e. The employer and the independent contractor)

Why hire a licensed contractor over an employee?

The internet era has caused potential increase to the remote workforce and remote hiring process which paved way to hiring employees as contractors. This contributes to a potential decrease in the labour costs, supply or office space costs and liability reduction. It is a notable fact that, not every business demands the necessity to hire a full-time employee to run their professional tasks. If a small business unit or a start-up requires a professional with specific skills to execute a short-term project, it is highly reasonable and efficient to hire a contractor instead of a full-time employee.

Contractors extend a wide range of competencies and specialities for the hiring manager to choose from. A significant benefit of hiring overseas contractors is the flexibility to contract out simple data entry tasks to complex operations involving high-end technology internationally. Platforms like Multiplier can assist with identifying, hiring and managing the contract agreement and payroll structure for overseas contractors.

Perks of hiring an independent contractor

Enlisted below are some of the advantages of hiring independent contractors:

  • Reduced threat over maintaining legal liability

It has been regulated by the state and federal laws of varied countries that employers should insure against liability for injury to their employees. In terms of hiring a contractors for your business, the employers are not held responsible for,

  • Injuries sustained by the independent contractors while providing their services
  • Ungrounded termination
  • Job discrimination or
  • Sexual harassment lawsuits.

However, employers may still be liable under certain circumstances which would claim much lesser legal liability as opposed to hiring an employee.

  • Labour Cost reduction

Companies that aim at achieving reduction on cost overheads, usually opt for hiring contractors over employees. This is because employers are not accountable for covering traditional benefits like, health insurance, tax filing or statutory benefits for contractors. Therefore, by hiring and paying an independent contractor, the employers usually save money on payroll taxes, along with the above-mentioned benefits.

  • Cost-cutting on supplies and office space

Independent contractors provide their own equipment, materials and office space. This saves significant amount of funds allocated for the employment add-on costs, which could be applied elsewhere.  

  • Access to international talent

Since the employers are not streamlining their search to a specific location, it opens the door to source professionals internationally thereby, promoting global hiring trends. This brings the best of the talent-pool into the picture and provides the employer to hire overseas contractors. The selected contractor may not even require any on-boarding sessions or hand holding to perform the task which ultimately reduces the recruitment costs.

  • Ease of termination

Generally, a contract is signed by both the parties while hiring an 1099 contractor for your business. This contract is destined to state the primary responsibilities of the contractor and expectations from the employer’s end. It involves a termination clause which states the flexibility to end a contract within a few weeks without any specific reasoning.

Despite the above-mentioned perks, the process of hiring or managing contractors could still be highly taxing due to the documentation involved or the consistent revamping of contractors. Multiplier profoundly manages a network of contractors besides complying with the legal documentation on behalf of the employer.

When not to hire a contractor

The contributions made by the contractor to a firm vary profoundly from what an employee has to offer. More specifically, there are certain instances wherein, choosing a contractor over an employee would result in a crisis. Certain examples of such scenarios include,

  • While nurturing a pilot team

When a firm is developing its pilot team, it completely relies on the individuals associated with the team. Therefore, stability is an eagerly sought-after trait within each of these individuals, as they belong to the core team, which is basically building the extended service lines.

  • While training employees with a long-term vision

Every organization plans to hire a professional with the required skill set and then work on developing their competencies and attitude thereby, making them an asset to the team. On the other hand, training a contractor to perform a task then watching them leave and applying their skills and knowledge elsewhere could be highly upsetting.

What to look for during the contractor hiring process?

Here is a checklist of the things you should know before hiring a contractor:

  • Investigate on the contractor’s work history

The ability of each contractor varies based on their work history so, it is imperative to ensue that their capabilities match your job roles and responsibilities. Consider three primary parameters for this evaluation, workmanship, client satisfaction and the quality of work.

  • Be aware of contract details

A contract should include primary information like, a description of the products and services expected from the contractor, the start and termination dates, along with the pay scale and the consequences of default by either party.  

  • Be inclusive and anticipate Delays

It is essential to try and include the contractor in meetings, emails, and other operational tasks to have an active participation. Also, delays in deliverables may incur with absolutely no fault on the contractor. Despite the timeline outlined in the contract, circumstances such as weather may prevent the work from remaining on schedule. Hence, it would be appreciated to be realistic and prepare to adjust your plans accordingly.

Challenges associated with hiring independent contractors:

  • Misclassifying employees for contractors:

A major liability for employers is misclassifying employees as independent contractors especially while hiring Independent contractors online. Typically, misclassifying an employee involves the threat of exposing employers to federal sanctions and investigations, unexpected unemployment and workers’ compensation lawsuits and state audits or penalties.

  • Penalty for hiring unlicensed contractors:

Unlicensed contracting can either be considered as a felony or a misdemeanour depending on the federal or state laws of a country. This felony would be charged with a heavy penalty or probation time in the jail hence, it is essential to check the documentation beforehand while hiring overseas contractors.

  • Hiring a contractor for your business without workers comp insurance:

Such cases could leave you to pay an injured contractor's medical bills indefinitely along with the lost wages while being unable to work. This expense cannot be covered under any insurance since the contractor does not have a workers’ comp insurance.

  • Limited flexibility over the work schedule

Unlike employees who work dedicatedly for a firm, contractors are independent and have the liberty to decide how best to perform a task assigned to them. Micro-management or several status updates may not be appreciated in this relationship. This is a common challenge encountered by employers while hiring an international contractor.

  • Ownership of work:

While hiring contractors to work on products that are subjected to copyright restrictions, the ownership of the final product would belong to the contractor. In such cases, it is essential to sign a written agreement transferring the copyright ownership from the contractor to the employer.

  • Fluctuating availability

Predominantly, employers use contractors only for relatively short-terms projects since their availability is unstable especially in the case of hiring overseas contractors. It means that the contractors providing a service keep altering constantly thereby, projecting variations in the quality of work incurred. This can be inconvenient or disruptive for the employers thus, in such cases it would be beneficial to hire an employee instead of a contractor.  

How does Multiplier help you to hire an independent contractor?

Multiplier is a hi-tech platform that assists you with finding, hiring and managing international contractors across the globe. Irrespective of the number of countries you would like to expand in, or the genre of work involved, Multiplier can hire the required contractors while you just relax and watch the vivid talent pool being added to your organization and managed efficiently.

Multiplier would also manage all the contracts documentation on an international scale besides enabling worldwide pay-outs to mitigate risks and streamline the entire process.

To know more details, connect with our business consultants at Multiplier today!

Hiring and onboarding using Multiplier ensures you hire remote talent with locally compliant, fool-proof job contracts, offer emphatic benefits and disburse salaries accurately with absolutely nil errors in payrolls.

Schedule a Meeting