If you work with independent contractors, it is important you take care to hire trustworthy people and establish rules before work begins.

Following are some guidelines from www.employmentblawg.com for hiring an independent contractor:

• Use contractors who have already established their businesses and solidified their status as independent businesspeople.
• Avoid immediately hiring as independent contractors former W2 employees of your business. Because filing a 1099 and W2 tax form for the same Social Security number in the same tax year can raise concern for auditing agencies, you should give the former W2 employee time to first establish other clients and invest in his or her business.
• Be wary of being an independent contractor's sole source of income, which can make your relationship appear more like an employer/employee relationship.
• Conduct background checks and require appropriate confidentiality agreements. An independent contractor is on-site and may have access to employee information, client information and financial data. You need to be sure you hire someone you can trust.
• Be sure you have an agreement that defines a specific and closed-ended project. It should address information such as expected deliverables, dates and total dollar amount associated with the project. The agreement also should focus on the specific project and its expected outcome instead of a general need or methods to reach that outcome.

This Web exclusive information is a supplement to Pitfalls of temporary employment.