How to hire contractors the right way

While employees are under a contract of employment, contractors take on contractual obligations to provide a specific job.

What is the difference between employees and contractors?

Employees

  • Work under a contract of service. The employer tells how to perform a task, what task to perform, when to perform it and where the job should be performed – known as ‘how, what, when and where’ tests.
  • Sign an employment contract
  • Must follow company health and safety guidelines and the employee handbook
  • Eligible for auto-enrolment
  • Eligible for enrolment in benefits packages
  • Must contribute to national insurance
  • On payroll

Contractors

  • Work under a contract for service
  • Sign an IR-35 compliant consultancy service agreement via a service company, including a detailed outline of the work, timeline, and fees.
  • May sign an NDA
  • Self-employed and in charge of their tax return
  • Not required to receive the employee handbook
  • The employer is not required to enrol in any of the company benefit packages.
  • Is allowed to provide a substitute
  • Eligible for enrolment in benefits packages


What do these differences mean for HR managers and business owners?

The employee has some long-term involvement and adheres to the company’s culture and success. However, a contractor has usually a short-term commitment to the company and little incentive for its success.

As the use of contractors is increasing, managers suffer from extra paperwork and confusion due to the different employment statuses. The two types of workers can also differ in hiring practices, tax reporting requirements, the value of work, and payment methods. Moreover, the new rules for off-payroll workers, known as the IR35 regulation, has increased the confusion by tightening the lines between the two statuses.

Therefore, it is more important than ever to have an easy-to-use HR technology to book, manage, and pay any type of staff so that business owners can save time and money on non-revenue generating tasks.

Here is how Moonworkers HR technology can help!


Scale your team the easy way with on-demand contractors

Need to size up for a project quickly? Browse hundreds of talented UK-based contractors and temporary workers on Moonworkers, and plug them right into your HR and payroll. Check their abilities, send them booking offers, and get replies in minutes. We ask each of our contractors to complete a rigorous screening and interview process. You can even chat with their previous employers.


Simple automated onboarding

Whether you hire a contractor or a temp, you have nothing to worry about. Onboarding and managing contractors are simple with Moonworkers. Our step-by-step flow helps to make sure nothing gets missed.


Seamless document tracking

Thanks to our integration with HelloSign, uploading, signing, and filing personalised contractor documents is a breeze.


Simple-to-use timesheets

Contractors simply clock in and clock out through Moonworkers, making it simple for you to validate their hours and pay.


Pay contractors through Moonworkers

Timesheets approved? Nice! You can choose to pay contractors through Moonworkers and save even more time.

Conclusion


As organisations continue to transition to hiring independent contractors for services, Moonworkers continues to evolve with them. From efficient & digital onboarding to accurate payment and job costing, the type of worker shouldn’t affect your HR process. If your business frequently works with contractors in the UK, Moonworkers is the HR solution for you. Take a free tour today to see why we’re top-rated in the industry!

Sophie Mourou

Project Manager

Sophie has over 15 years of experience in film and digital project management. She has always worked on innovative products and creative marketing campaigns.