Q: One of my contract employees showed up drunk at a client’s site, behaved erratically and was removed from the premises by site police. Needless to say he caused us significant embarrassment (he was wearing a company shirt) and we won’t be using him again. If he were an employee I’d know how to proceed, but what is the best way to terminate a contract employee that we only use as needed?
A: What you refer to as a ‘contract employee” is best described as an independent contractor and it’s much simpler to sever this relationship than it is to terminate an employee. Simply notify the contractor that you no longer need his services.
From your question, I’d guess you didn’t have anything in writing. Going forward, I recommend that when hiring an independent contractor, you always get a signed written agreement that defines each area of the business relationship. For instance, a simple one-page agreement should include:
Who is responsible for what. Make clear the contractor is responsible for worker’s compensation insurance, self-employment tax, income tax, and FICA tax. And that you aren’t responsible for collection or payment of those taxes or complying with any federal withholding requirements.
How much. Define payment: per hour or per job; and stipulate no payment for sub-par services. Spell out that you’re not providing or guaranteeing a specified minimum level or amount of work.
How well. Outline expectations. Services must be performed in a professional manner (as opposed to showing up drunk) and must meet applicable rules and standards
Parting ways. Customarily, the contractor relationship can be terminated by either party for any reason at any time, although sometimes a few days notice is stipulated.
Other. When appropriate, add a paragraph about confidentiality; or who owns intellectual property of creative or scientific work; or how certain expenses such as transportation or uniforms will be reimbursed.
Lastly, always check a contractor’s prior client references. It’s easy to let your guard down and skip due diligence when hiring independent contractors. But, as your case illustrates so vividly, contractors are just as capable of hurting your image and reputation as your employees. Similar care in selection is advised.
© Copyright Eva Del Rio– Published in The Gainesville Sun on June 26, 2011
