Hiring talent internationally is a standard practice for many growing companies, and working with independent contractors may be part of your strategy. Learning how to apply this worker type is essential for a successful hiring process in Bermuda.
Independent contractors vs. employees
Independent contractors work on a project basis and provide services to employers as separate entities. They work for fees rather than wages or salaries, and they have complete freedom in how, when, and where they conduct their work. Employers only have control over the final result of a contractor’s work.
Contractors are not subject to labor laws as employees are, so they do not receive benefits or deductions from their pay to cover taxes and social security contributions. The differentiation between contractors and employees is essential. If there is a clear employer-employee relationship, but the individual is treated like a contractor, you may face penalties such as back payments on social security and fines.
How to hire independent contractors in Bermuda
You will work through three key steps to hire an independent contractor.
1. Carefully conduct interviews.
It’s helpful to treat interviews like business transactions when hiring contractors. You do not want to indicate in any way that you will have an employer-employee relationship with these individuals. Rather than asking questions about personality or workplace behaviors, focus on skills and past projects that could indicate a professional’s ability to provide the services you need.
2. Create a service agreement.
Service agreements are contracts that define the rights and obligations of you and your contractor. These documents do not need to incorporate details from the labor code as employment contracts do. Your service agreement should include:
- Pay rate and arrangements
- Description of the project
- End date or timeline of the project
3. Introduce necessities.
Training can imply employer control, so it’s best to only introduce necessities for the project. These necessities will change based on the task, but they might include proprietary tools and contacts at the company.
Turn to G-P when hiring independent contractors in Bermuda.
As an extension of our Global Employment Platform™, G-P Contractor allows companies to hire anyone, anywhere, for both short- and long-term projects. Whether you’re hiring employees or contractors, we streamline the process with a single solution for your global workforce. Contact us to learn more.
THIS INFORMATION IS FOR INFORMATIONAL PURPOSES ONLY AND DOES NOT CONSTITUTE LEGAL OR TAX ADVICE. You should always consult with and rely on your own legal and/or tax advisor(s). Globalization Partners does not provide legal or tax advice and the information is not tailored to the specific situations of your company or your workforce. Globalization Partners makes no representations or warranties concerning the accuracy, completeness or timeliness of this information. Globalization Partners shall have no liability arising out of, or in connection with, the information, including any loss caused by use of, or reliance on, the information.