Hiring independent contractors in Bahrain can help your company manage a broad range of specialized projects. To begin the process, ensure you understand critical legal stipulations and worker classifications.
Hiring contractors in Bahrain
Before you hire independent contractors in Bahrain, you’ll need to understand the national labor laws and your responsibilities.
Independent contractors vs. full-time employees
The main differentiator between contractors and employees is that contractors are self-employed. They act as their own private businesses, offering services to companies. As a result, contractors cover their own benefits and can work with multiple companies simultaneously if they choose. They are not under your company’s authority or on your payroll.
Penalties for misclassification
Following proper worker classification protocols is a priority when hiring contractors. If you wrongly classify an employee as a contractor, your company could be liable for all benefits owed to them since they started working for you. You could also face fines for employee misclassification.
How to hire independent contractors in Bahrain
Whether you’re hiring a contractor for a long-term or short-term project, make sure to follow these steps as you begin the process.
1. Carefully conduct interviews.
Since contractors offer project-specific expertise, they’ll be prepared to discuss requirements and skills related to the project’s needs. Rather than assessing personality and culture fit as you would in an employee interview, focus on the contractor’s experience and available services.
2. Create a service agreement.
Once you’ve selected a contractor, set a framework for a cooperative business relationship by creating a service agreement. While you’re not legally required to do so, making a formal, written service agreement can ensure both parties understand their responsibilities. Cover these terms:
- Pay rates and arrangements
- Services the contractor will provide
- Duration of the project
- Termination conditions
3. Introduce necessities.
Extensive training is not necessary for a contractor; however, they may need some introduction to your company’s specific processes and workflows. Ensure they know how to access any programs and tools they will need and provide a point of contact for any questions that arise.
How to pay independent contractors in Bahrain
While they are not on your payroll, contractors should receive secure and regular payments based on your agreed-upon compensation schedule. You can use a money transfer provider or another service to facilitate payments. Ensure you know of any restrictions when sending money internationally.
While you don’t typically need to withhold taxes from contractor payments, you do need to meet the terms and rates outlined in your service agreement. You can also discuss with the contractor whether to deliver compensation in your company’s local currency or Bahraini dinar.
Terminating independent contractors
Contractors generally work from project to project or for a set time, so termination conditions are straightforward. Your company and the contractor have legal jurisdiction over the terms for extension and termination.
It’s best practice to set up termination protocols in the service agreement. If you have issues with contractor performance or cooperation with service conditions, you’ll have a straightforward path to terminating services.
Turn to G-P when hiring independent contractors in Bahrain.
As a part of our #1 suite of global employment products, G-P 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.