September 26, 2023 in Business

Dangers of Contractors

Using Contractors- What you need to know.

It is very popular to use contractors these days rather than employ people directly due to the costs and rules that go with employment.

However aside from the need to satisfy HMRC requirements to make someone a proper contractor and not an employee with a different title – there are several serious dangers and legal pitfalls of using contractors to avoid.

The Dangers

  1. If you engage someone as a contractor and give them all the information about your business to enable them to do the work, you need. They then tell their friends about your business and a competitor hears and steals your clients and /or business methods.
  2. If you give your contractors the personal information about your clients needed to do the work. They then leave their laptop in a café/ get hacked and your client’s information is out there. Your contractor has no proper security on the laptop. Your client finds out and gets angry. Your contractor disappears leaving you with the mess.
  3. You pay your contractor to create a spreadsheet that you use every day in your business and becomes an essential part of your procedures. One day your contractor says they want £4000 for you to continue using the system otherwise you must stop doing so. It will take hours of work to extract the system from your procedures and what do you replace it with?
  4. You are not satisfied with the work provided because it is not of the standard you required. You tell the contractor you do not want them any longer. They cause a big fuss and say you had agreed work for a set period, and you are just being nasty. You cannot show what work was agreed and what standard was expected. The contractor threatens to sue for money for work they never completed.

The list is endless.

All these issues can be avoided by having a written agreement in place with any contractor.

Why you need a written agreement

  1. What you expect and is agreed- for how long and for how much.
  2. You bind them to confidentiality
  3. You check they are GDPR compliant and sign an agreement to this effect.
  4. You make sure you own the copyright in work they do for you- not them.

So get an agreement in place and do not just hope for the best.