How to Hire a 1099 Employee
As your business grows, so does your to-do list. But sometimes throwing a new freelancer into the mix just adds more to your workload. Maybe you've posted jobs in the past, but the candidate pool you attracted wasn't that great. Or maybe you hired an individual or a company that simply didn’t fulfill the role you needed.
That could be because you didn't post the role in the right places, or it could be because you weren’t quite sure of the right fit for the role. If you’re considering searching for new freelance support for your business, it’s important to remember that you don’t have to settle for an okay candidate. You can hire the perfect match for your business needs by following a few simple steps.
Read on for everything you need to know about finding, hiring, and onboarding 1099 employees, and learn how Day to Day Assist can help ensure your next hire is the right fit.
What is a 1099 employee?
Technically, there is no such thing as a 1099 employee. The term 1099 is an IRS tax form code used to report non-employee compensation. A 1099 hire refers to what is usually called a contractor or freelancer. Employers typically have more control over how much, where, and when employees work. Freelancers have more control over their schedules and where they choose to work. Unlike employees, freelancers and contractors are generally not entitled to the same employee benefits as full-time workers. It’s important to fully understand state and national regulations for 1099 workers since misclassifying an employee as an independent contractor can result in penalties and back taxes.
Why should you hire a 1099 employee?
There are many benefits to working with freelancers and contractors. Many service-based businesses have busy times during the year when taking on extra help can ease the strain on time resources, especially for solopreneurs. Freelancers, like writers, consultants, and designers, can also bring highly specialized talent to your business. For example, you might not need a full-time social media marketer, but hiring a freelancer a few hours a month can boost your social media presence and bring in new leads. Additionally, full and part-time employees are often entitled to benefits like health insurance and paid time off. Contractors, however, are not entitled to these benefits, which can be a more cost-effective solution.
Before you hire a 1099 employee…
Make sure a 1099 contractor is actually what you need. Sometimes, simply working with another small business can help you complete specialized tasks, such as strategy, for a one-off fee. This option sometimes seems more expensive in the short term, but since it requires no leadership or training, working with another specialized small business can actually save you money in the long run by offering a one-and-done solution. For example, as you’re looking for freelancers, joining our Advisory to help you navigate that process means you’ll find the right fit for the long term, which will save you the time and money you would have otherwise spent searching for, interviewing, and onboarding candidates who might not actually have the skills you need for success.
As you search for contract workers, here are a few best practices to keep in mind:
Find the right fit for your service business
Before you create a call for freelancers, make sure you understand exactly what responsibilities come with the role you’re looking to fill and understand the qualifications you’re looking for in the ideal hire. Remember, responsibilities and qualifications are two different things. Responsibilities outline the day-to-day tasks that come with the job and qualifications give applicants a list of the skills, certifications, and licenses they need to be considered for the role.
When listing the qualifications you need in a freelancer, be sure not to go overboard. The responsibilities you’re delegating should match the level of experience you’re seeking. If you’re looking to pay a social media manager $25 an hour to work 10 hours a month, it’s probably unreasonable to expect an applicant to have 10 years of experience directly related to your business.
Advertise the position
When it comes to finding the perfect contractor, there are countless job boards to choose from. But posting your listing on all of them might cause you to be overwhelmed with applications, meaning that you’ll spend a lot of time mining those applications for just a few people who meet your needs.
Opting for quality over quantity is the best way to find contractors who will be a good long-term fit for your business. Look for candidates through job boards rather than asking applicants to email their resumes directly. You don’t want your inbox inundated with resumes.
Ask yourself a few key questions before you post your job listing:
Do I need them to be local?
One of the main benefits of freelancing is the ability to work from anywhere. But if you need to hire someone who has to be on-site, like a photographer, you should seek out local job boards.
Do I need a niche skill?
If you’re looking for specific skills, such as graphic design or copywriting, sites like Upwork or other industry-focused job boards might help you find more and better-qualified applicants than posting on a universal job board, such as Indeed.
Once you’ve figured out where to advertise the job, make sure your job description provides a comprehensive list of duties and expectations. Be fully transparent about compensation, perks, and benefits, even if they are modest. Doing so will attract genuinely interested candidates to the role. Make sure to be honest about the role and stay professional throughout the interview process. Show candidates that you're serious and give them a glimpse of what it's like to work with you.
If you’re unsure about exactly where to post your call for contract workers, or you haven’t found the right fit in the past, let us walk you through the process. Our Operations Consulting Service can take the guesswork out of where to post job listings and how to conduct interviews.
Make sure you’ve got the right documentation
After you’ve found the perfect 1099 hire for your business, make sure both you and your new freelance help are protected with both a contract and the necessary IRS paperwork. The first thing you’ll need to do is collect a W-9 form. The IRS provides a comprehensive overview of which employees qualify as 1099 workers and provides the forms on its website.
It's also important to formalize your agreements with 1099 workers through a detailed offer letter and written contract. A service contract helps establish their independent status and avoid any confusion about them being on the payroll. The contract should clearly outline the responsibilities of both parties, the nature of the work, payment details, and the degree of supervision involved. Additionally, it should cover termination conditions, how disputes will be handled, and penalties for any breach of contract.
Ask the experts.
Our Systems for Solo CEOs Advisory can help you find the right freelancer for your business without the hassle.
When you join, you’ll have full access to our team of operations and hiring experts. The Advisory will provide you will all the resources you need to build your custom hiring strategy, write a compelling job description, post the role(s), interview with confidence, and find the best-fit contractor for your team.
If you’d rather have a custom hiring strategy created for you, book our Operations Consulting Service. We’ll provide the strategy and custom prep materials you need to hire your next employee or contractor quickly. The service includes a 90-minute session, custom job description, job questionnaire, interview strategy, and onboarding plan. Plus we'll tell you exactly where to post the role(s)!
Hiring a contractor doesn’t have to be a headache. You can save time and money by learning how to do it correctly, or letting us handle it for you!
Ready to hire a contractor? Let Day to Day Assist help you find the perfect fit for your team.