As your company grows, hiring internationally can be an effective way to enter new markets and achieve your goals. Taiwan has a broad pool of independent contractors with specialized skills to help you meet various project needs.
Hiring independent contractors in Taiwan
Before you begin the hiring process, you must understand how independent contractors differ from employees and how this distinction impacts your responsibilities.
Independent contractors vs. employees
Because they are legally self-employed, independent contractors are not part of a company. Independent contractors are not subject to the direction and control of a company like employees; rather, they have the freedom to determine their own work schedules and methods of completing tasks. Labor laws in Taiwan state that companies are not liable for withholding taxes for contractors. Similarly, contractors are not legally entitled to benefits coverage.
Penalties for misclassification
Incorrectly classifying workers can have serious consequences for companies, so ensure the contractor designation truly applies. Misclassifying an employee can put companies at risk for fines and penalties, including retroactive benefits payments for the full duration of service.
How to hire independent contractors in Taiwan
Whether your company plans to hire contractors to work on-site or remotely, for short- or long-term projects, you can follow these 3 steps to start the hiring process on the right foot.
1. Carefully conduct interviews.
Contractor interviews typically address project-specific needs and prior experience. Focus on discussing the contractor’s relevant skills and certifications. Contractors are not part of a company, so personality and cultural fit should not be determining factors as they would in employee interviews. Hiring an independent contractor is a business-to-business transaction for services.
2. Create a service agreement.
The next step is to establish specific working terms that are acceptable for both parties. Service agreements are not a legal requirement, but they serve as a helpful framework. Include these details in the service agreement:
- Pay rates and arrangements
- Services the contractor will provide
- Length of the contract
- Termination conditions
3. Introduce necessities.
While in-depth training might suggest a level of supervision that does not apply to contractors, you may need to provide a general scope of certain aspects of your company. Ensure contractors understand any company-specific tools, programs, and workflows that apply to the project and connect them with a point of contact for questions.
How to pay independent contractors in Taiwan
Contractors are not on company payroll. They are usually paid a lump sum after completing the specified project or at certain project milestones. You may negotiate whether to use your company’s local currency or Taiwan’s national currency (TWD). Ensure you’ve researched any restrictions for sending compensation internationally before setting up payments.
While companies typically do not need to cover taxes or benefits for contractors, you do need to meet remuneration conditions and schedules agreed upon in your service agreement.
Terminating independent contractors
Independent contractors usually work on specific projects, so termination of service is straightforward. Both parties have freedom to outline terms for termination and extension of service in the agreement.
Regardless of the situation, be sure to detail termination protocols in case there’s an issue with the contractor’s performance or cooperation with service terms. A legal framework will help protect your company in the event of a dispute.
Turn to G-P when hiring independent contractors in Taiwan.
As a part of our #1 suite of global employment products, G-P Meridian Contractor™ allows companies to hire and pay global contractors faster, with self-service workflows and a wide set of flexible payment options. Whether you’re hiring employees or contractors, our platform streamlines the process with a single solution for your global workforce.
Contact us to learn more.