Why and How to Create an Independent Contractor Handbook

by: Lesa Hammond, CEO, ProfHire, Inc.

Independent contractors, consultants, contract workers, 1099 “employees”, and outsourced staff. All of these are names used to refer to individuals who work for you, but are paid outside of payroll.

Do you have any of the following individuals working for you but not they are not paid on standard payroll?

• Talent pool of independent consultants who are subcontracted through your company to do work for your clients under your company name and on your behalf
• Staff you use on a consistent basis that come from a secondary firm (staffing agency or specialty company)
• Small pool of freelancers you use as needed
• Outsourced services that are an integral part of your operation

If you do, there are many benefits to having a handbook specifically developed for these independent members of your team.

Before you write a handbook for them, let’s make sure the individuals you are paying as independent contractors are correctly classified. How you classify the people working for you is not your decision. The IRS has guidelines to say who is an employee vs. an independent contractor, the Department of Labor (DOL) also has rules, and some states have even stricter rules. Misclassification of employees can result in fines, penalties and major headaches. If you are unsure of whether an individual should be an employee or an independent contractor you can check with your tax consultant, HR expert, or attorney.

Now, regarding the contractor handbook. Do not give contractors a copy of your employee handbook and do not attempt to combine information for employees and contractors into the same handbook. Doing so will confuse them and you, and possibly indicate that you are treating them as an employee. You want to make the independent contractor role clear to everyone (you, your employees and your contractors).

Having a handbook for your independent or outsourced help is a good idea, particularly if they consistently play an important role in your organization. The handbook provides guidance, gives them a sense of your company culture, and provides them with key information they need to know. It also helps set you apart from their other clients.

So, what goes into a contractor handbook?

• A welcome letter from the CEO.
• Your mission, vision, values, and guiding principles.
• Details about your company culture and practices.
• Answers to frequently asked questions
• Company specific information like where to park, how and when they can gain access to the building, and when certain events usually occur.
• Any rules or regulations (policies) that also apply to the contractors. Many of your policies will not.
• Anti-discrimination and anti-sexual harassment policy.
• Whistleblower procedures.
• Complaint procedures.
• Health and safety information (if applicable).
• A reminder that independent contractors exercise independent control in how they approach and complete a project and that they are responsible for obtaining and using their own tools and equipment to complete their tasks.

Do not add anything that would imply that they are employees, such as calling in when sick or time to arrive at work, etc. You can put standard operating hours, but any arrangements of work hours should be arranged individually and be flexible.

You may want to have separate operating manuals for your contractors or consultants who do work that integrates with your operation. If you choose to do this, and I encourage you to, you will want to create different operating manuals for various responsibilities, such as: answering the phone, social media, consulting as a subcontractor, marketing, web development, or recruiting.

All of your handbooks and manuals should be kept online and easily accessible, not printed. This allows you to keep the information up-to-date and ensure everyone has access to the same version. When you have printed manuals, you quickly end up with different versions floating around. Having a single place where employees and contractors can easily access the information they need is a good practice. It also lets the people that work for you know that you are organized and care that they have the information they need to do their best work. Providing well written documents that are readily available to your independent contractors and employees will greatly assist in creating a highly product, committed and conscientious team.

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AttacheWorks by Prof360, is a cloud-based employee management solution that acts as a briefcase in the cloud for you and your employees and independent contractors. All of the information you need to manage your employees, at your fingertips. Contact us for help creating your handbooks, operating manuals, or to get started using Attaché for Business.