Outsourcing is all the rave at the moment. Businesses are now outsourcing work to freelancers more than ever before.
Businesses are outsourcing work to freelancers because it is a great way to delegate specific tasks to others who are perhaps more qualified than they are. Other reasons are that they don’t have the time to do that specific task themselves or the money to hire a full-time employee in that area.
Outsourcing work to freelancers is a great and proven way for a business to grow, but you need to have your bases covered first, particularly from a legal point of view.
In this post we’re going to show you what you need to do to make sure have got your legal bases covered when outsourcing work to freelancers.
You Should Use Contracts
A contract should be an essential requirement when outsourcing work to freelancers and you shouldn’t use freelancers without one. Likewise, freelancers also shouldn’t be working without one. They are designed to protect both you and the freelancer.
Here are a few compelling reasons why you should start using contracts and areas they need to cover:
1. They establish and define the working relationship between you and the freelancer
Without a clearly defined description of the working relationship between business and freelancer, things can potentially become blurry. Your freelancer should only be doing specific work that you define and determine in advance.
Likewise, freelancers should also only be doing work that’s been specified in a contract.
2. Defines the kind of services the freelancer is expected to provide
The contract should define what the freelancer is expected to do. What is their role specifically? What kind of work should they be doing and not doing?
This is the easiest way to prevent misunderstandings between both the business and the freelancer. It’s as beneficial to you as it is to them.
3. To define employment status
This one is mostly for tax purposes. If you have employees in your business then there are certain tax and other legal requirements you must abide by. Employees will also need different contracts compared to freelancers as well.
However, for freelancers, it needs to be stated that they are an outside contractor that you are paying for a specific set of services.
4. Expectations around payment
Contracts should outline how payments will be made and in what frequency. You can also specify any other important payment details at this point. For example, perhaps there is an agreement where you pay the freelancer monthly royalties or commissions on a product they helped create and sell.
5. Intellectual property rights
It’s important you clearly set from the outset who has intellectual property rights over the work. You may want to take sole rights of the work, or even allow the freelancer to have rights over it as well.
6. How any disputes will be settled
You need to have written into any contracts how disputes will be settled. There will be different preferences for how disputes will be settled for both businesses and freelancers. Whatever it is you choose for resolving disputes, you need to have it written out clearly in the contract.
You Need An NDA
An NDA (Non-Disclosure Agreement) is designed to protect the confidentiality of your business, even for the specific case of working with freelancers. It means that the freelancer cannot release certain information about any work completed or the nature of that relationship to the public.
It’s basically a written agreement that specifies what information about the work completed or the relationship can and can’t be shared. This can also cover things like giving the freelancer rights to use your work as part of their portfolio or keep them purely for yourself.
Essentially, all freelancers that work with your business should sign an NDA and ensure that they are protected from certain information being made public. This is especially relevant in certain industries where confidentiality is vital like legal firms for example.
The two most important things you need to ensure that you’re using legal best practices when outsourcing work to freelancers is a written contract that is recognised by the law and an NDA.
Final Words: Outsourcing Work To Freelancers
Outsourcing work to freelancers will help you grow your business and you should use them where necessary, but make sure you’re legally protected first. All sorts of small and big problems can occur otherwise.
Feeling confused about creating contracts and NDA’s for your freelancers? Then get in touch and speak to one of our legal experts.