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Freelance contracts: Everything an employer should know



So you’re looking to hire a freelancer? Choosing to work with freelancers or contractors can be a great choice for your business and there are many benefits to choosing to work in this way, but to ensure you get the desired outcome, and that the work remains compliant with IR35 laws, you’ll need to make sure that you agree on a clear contract that works for both of you.


What is a freelance contract?


Just like with any other contract, contracts for freelancers will outline the ways in which you will work together and how work will be carried out. This could include anything from the details of the work that needs completing, when, where, and how the freelancer will work and what remuneration will be.


Drawing up a freelancer contract is an important part of working with freelancers or contractors. It is designed to give both of you a clear understanding on the working relationship, as well as protect you both legally should one side not hold up their end of the arrangement – whether that be failure to deliver the services agreed or failure to pay for services provided.


For employers, freelancer contracts are also a vital part of remaining compliant, particularly when it comes to IR35. Classifying workers is the organization's responsibility, and having contracts for your freelancers is one of the easiest ways to provide a clear “outside of IR35” determination should there be any investigation.


How are freelancer contracts different from employee contracts?


The main difference between freelancer and employee contracts is that since freelancers are self-employed, they have much more autonomy over when, where and how they work. As the employer, you can state what work needs to be done and when you need it done by, but in order for the freelancer to be classed outside of IR35 legislation, the when, where, and how part is ultimately down to them.


However, this doesn’t mean you can’t negotiate and agree when, where and how the work gets done – after all, it’s only natural for you to want to know how the work is progressing, and being aware of what’s happening and when is a necessary part of this.

What things should be included in freelancer contracts?


Not all freelancer contracts are created equal, and you may choose to add or remove certain things depending on the scope of work required or the relationship with the freelancer. Often freelancers will have their own contract templates they use with clients, but remember contracts are always open for negotiation to ensure you’re happy with what you’re signing up for.


Below are some of the standard areas you should make sure are covered in your freelance contracts:


The nature of the work and timeframes


As standard, any contracts for freelancers should detail the work that is required and the timeframe in which that work needs to be completed. It’s important to be as specific as possible so that there’s less room for discrepancies and so that you are getting exactly what you’ve asked for and are paying for. This works both ways too, to ensure that the employer doesn’t start asking the freelancer to do things that weren’t agreed in the contract. If this part is vague, then it leaves room for one or both parties expecting more or less than originally agreed upon.


What is required to complete the work


Since freelancers tend to work remotely, it is important to be clear on what resources they will need to complete the work. Do they need access to certain programs, work accounts or specialist software to complete the job? Make sure you find out if they have everything, they need to complete the work successfully and agree on what is provided by them and by you. This will ensure no unexpected costs are incurred for resources that weren’t provided from the start.


Clarifying the nature of the working relationship


As mentioned earlier, it is important to be clear about the status of the freelancer in writing, as this is the main way you can evidence IR35 compliance when declaring their status. Your freelancer contract should explicitly state that they are to conduct services as a freelancer, and that they are responsible for paying their own taxes and National Insurance Contributions. It should also specifically detail what other rights they have as a freelancer working for your organization.


While a contractor or freelancer should have their own public liability/professional indemnity insurance, you are still responsible for their health and safety.


Payment


There are a few different ways to legally pay your contractors and freelancers. Whether you agree on an hourly, day or per project rate, this should be explicitly mentioned in the contract and what that cost is. Other things to include here could include the cost of revisions, changes or extensions should work overrun or change course. This helps to ensure there are no dramatically unexpected costs incurred. This section should also include how the payment will be made.


Privacy and copyright


Depending on the nature of the work, you may wish to include a section on copyright and intellectual property rights to protect any work that they do for you. This is particularly common with design work or content creation.


You may also want to consider negotiating things such as conflicts of interest with other clients, in which case including a Non-Disclosure Agreement as part of the freelancer contract could be an option if they will be working on a project that needs to be kept private.


What else should you consider when drawing up contracts for freelancers?


All freelancers and organisations work differently, so anything else you add to your contract is completely up to you and the work being delivered. The more detail that can be included in a freelancer contract, the better, as this gives both parties a clear understanding of the duties and responsibilities to be upheld, and will ensure work is delivered on time and to a high standard.


While freelancer contracts can seem quite formal, they are there to provide a strong, healthier working relationship and ensure both parties are happy with the arrangement from start to finish.


If you’d like to learn more about how WorkSavvy can help you manage freelancer contracts, get in touch today for a free demo.

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