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Sometimes partnerships or contractor agreements must end due to issues with the quality of the work, a change in your business needs or a reduced budget for outsourced services. Oftentimes, these contracts are with freelancers who have been around for years. Maybe they’ve even been invited to your company\u2019s holiday party. How can you successfully separate from these individuals while causing the least amount of turmoil?<\/p>\n
This article will support you through the process of ending your working relationship with a longstanding independent contractor, helping you:<\/p>\n
Your independent contractor may not be a W-2 employee, but they are human, and you should attempt to resolve any issues before moving to contract termination \u2013 much like you would with a regular employee.<\/p>\n
For example, if a full-time employee\u2019s communication or performance<\/a> were off, you would probably take them out for lunch and discuss the issue, getting it out in the open. You would try to find a resolution and continue working together. If you’re in this situation with an independent contractor, it doesn\u2019t hurt to pay them the same respect and try to work out your stylistic or communication differences.<\/p>\n This approach isn\u2019t just best practice from the human perspective. Consider the business needs; it costs time and money to find someone to replace this individual, even as a 1099 worker.<\/p>\n It\u2019s good practice to know the potential impact on your company\u2019s bottom line before raising issues with a contractor. Ask yourself:<\/p>\n If the answers are no, the resolution could be figuring out how you can resolve the problem without ending a relationship. From both the human and business perspectives, the right thing could be waiting to resolve minor issues until a project is finished, setting a meeting to discuss the issue<\/a> or even looking at the problem from a new perspective and deciding it\u2019s not as huge you once thought. All of these are good to consider before moving to end your relationship with an independent contractor.<\/p>\n If you\u2019ve determined it\u2019s time to end a contractor relationship, regardless of whether there are problems with the person\u2019s performance, there are legal factors to consider before proceeding.<\/p>\n Again, independent contractors who have provided services to your business are self-employed, so you cannot terminate their employment as you would a W-2 employee. Instead, ending a contractor relationship involves terminating the professional services agreement and statement of work between your company and the contractor.<\/p>\n For this reason, as long as you have correctly classified your independent contractor<\/a>, labor laws do not apply to your relationship with this individual. However, you are responsible for honoring the terms of your agreement under contract law, which will help you avoid a breach of contract lawsuit.<\/p>\n Specifically, you\u2019ll want to review your original agreement with the independent contractor to understand and carefully follow any:<\/p>\n Before you begin the process of terminating a contractor relationship, reach out to your legal counsel. Their guidance will be especially important to you if:<\/p>\n Seeking clarity on the legal aspects of terminating a freelance contract helps you honor your agreement with this individual and minimize your risks.<\/p>\n When it\u2019s time to communicate with a contractor about ending your professional relationship, make it your goal to treat this person like you would a W-2 employee in the same situation. This is best practice because:<\/p>\n So, here are ways you can show consideration at the end of a freelance contract.<\/p>\n Applying HR best practices, even when terminating a freelance contract, extends your employer of choice<\/a> reputation beyond the workforce you traditionally employ.<\/p>\n Graciously closing out a significant independent contractor relationship involves:<\/p>\n Regardless of pay style or structure, people want to be valued. When you follow HR best practices while working with independent contractors, you communicate that you\u2019re an organization that honors work contributions of all kinds. Get the insight you need to manage your people more proactively. Download our complimentary e-book now:\u00a07 Most Frequent HR Mistakes and How to Avoid Them<\/a>.<\/p>\n\n
Ending a contractor relationship: legal factors<\/h2>\n
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Terminating a contractor agreement: HR best practices<\/h2>\n
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Summing it all up<\/h2>\n
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