Contract Negotiations Breakdown


Contract Negotiations

Businesses today often employ a combination of full-time workers and subcontractors. While this provides greater flexibility among a business’s workforce, it also creates a few complications for the human resources (HR) staff tasked with handling payroll and IRS paperwork.

Because a business’s non-salaried workers aren’t part of the payrolling process, however, most organizations tend to protect the relationship with a contract. Since ensuring that this paperwork is on file usually falls under the HR department’s list of responsibilities, it’s important that HR professionals know what information should be documented in writing prior to a contractor beginning work.

Scope and Duration of Agreement

The most important part of the paperwork you’ll have on record is the documentation that lists exactly what the worker will be doing and how long the partnership will last. This serves not only to protect your organization legally but also to provide an outline to the worker of his start and end dates. This will serve as written validation of the duties to be performed and the scope of the arrangement. If you reach the end of the designated schedule and you need the arrangement to be extended, you can always set up a new contract.

Non-Disclosures and Non-Competes

Along with acquiring 1099 forms, you should also obtain signatures on any protective documents, including those that specify that all information must be kept confidential. If you have concerns that the worker might take the information gained during the work arrangement to a competitor, you can also require a signed non-compete agreement.

Keep in mind that HR staff may be called upon to mitigate contract negotiations between subcontractors and management. In this capacity, the HR team may be tasked with providing advice to avoid misclassification. This new environment requires HR workers to extend their knowledge to new areas, so it’s important that management and HR work together to make the process go as smoothly as possible.

Posted in HR/Payroll.

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