If you’re considering hiring independent contractors from Singapore to work for your company, you need to understand the rules and regulations behind the process. With the right recruiting strategy, you can take advantage of extensive industry expertise from the broad pool of independent contractors available in the country.
Working with independent contractors in Singapore
Offering a diverse population of professionals with different specializations, Singapore is an excellent place to find skilled independent contractors for your company.
Differences between an employee and an independent contractor
Independent contractors are workers who provide paid services (or products) to another party. They are classified differently than employees, and are usually not entitled to the same benefits, such as paid leave, sick days, and minimum wage.
The more control that a company has over the individual, the more likely that individual is an employee. There are other various factors that courts look at in Singapore to determine whether the individual is an employee or an independent contractor, including whether:
- The individual’s work forms an integral part of the business.
- The individual owns and provides their own tools and materials.
- The individual works predominantly for the company or multiple companies.
- There are specific working hours.
Penalties for contractor or employee misclassification
If you’re considering hiring Singapore-based independent contractors for your company, ensure you classify them correctly. Companies that misclassify employees as independent contractors may be liable for:
- Fines, penalties, or potentially imprisonment.
- Back-payment of employment entitlements.
- Outstanding tax liabilities.
How to retain the services of an independent contractors for your company
An established strategy can help you support your independent contractors and their success in completing your company’s projects. Consider these best practices.
1. Select candidates strategically.
As you evaluate applicants’ credentials and experience, keep in mind that independent contractors are typically skilled professionals who offer extensive industry knowledge. Independent contractors are providing a service rather than coming on as employees, so it’s best to treat the process like a commercial transaction.
2. Establish a clear contract.
When you’re hiring independent contractors internationally, it’s best to create a contract for service. Consider including these key points in writing:
- Duration of service
- Scope of duties
- Terms for extension or termination of the contract
- Pay rates and schedule
3. Know how to work with independent contractors.
An important step in engaging the services of independent contractors is understanding how to work with them. Independent contractors should not receive the level of control or supervision that employees do – they are generally free to perform the work according to their own schedule and methods.
Paying independent contractors in Singapore
While independent contractors are not legally on your company’s payroll as employees, they are entitled to agreed-upon compensation. You may choose to use a secure money transfer provider to deliver scheduled payments to your independent contractors. Remember that you’ll need to find a service that can provide funds internationally.
Under Singapore’s Employment Act, you are not responsible for withholding social security payments, providing health insurance, or offering other benefits and remuneration to independent contractors. Your company will need to meet any commitments for payment rates and schedules outlined in your contract.
Termination or extension terms for independent contractors in Singapore
Independent contractors typically work on a project basis or for a set duration, so termination or extension is usually straightforward. Even so, best practice is to set clear terms for ending or extending your contract. If either party breaches the contract terms or encounters other issues, they can be released from their commitment.
Turn to G-P when hiring independent contractors in Singapore.
As a part of our #1 suite of global employment products, G-P Meridian Contractor™ allows companies to hire and pay global contractors faster, with self-service workflows and a wide set of flexible payment options. Whether you’re hiring employees or contractors, our platform streamlines the process with a single solution for your global workforce.
Contact us to learn more.