From a diverse talent pool to an abundance of specialized industry expertise, Colombia can offer a range of advantages for companies hiring independent contractors. Consider some best practices for engaging contractors to handle various projects.
Hiring independent contractors in Colombia
Before you hire independent contractors to complete specific projects, it’s important to know a few critical details about how the process works. Keep these details in mind as you begin the process.
Independent contractors vs. full-time employees
Because they are legally self-employed, independent contractors do not function as a part of your organization as an employee would. Instead, they operate as their own business, providing selected services to your company. Independent contractors do not receive benefits, have freedom regarding how they complete their services, and are not subject to fixed working hours.
Penalties for misclassification
If you misclassify full-time employees as contractors, your company risks legal repercussions. You could face lawsuits, fines, and retroactive benefits compensation to repay the employee and the government. Because labor designations can vary depending on your unique situation, always consult labor laws before using independent contractors for a project.
How to hire independent contractors in Colombia
As you prepare for the process, ensure you have a successful strategy in place to help support your objectives and find independent contractors that meet your company’s requirements.
1. Carefully conduct interviews.
Working with an independent contractor is a business-to-business transaction. You can expect these professionals to be highly knowledgeable and experienced in their respective fields, so customize your interview questions to your specific project needs. During the interview process, you can also discuss past projects they’ve completed and certifications and skill sets they maintain.
2. Create a service agreement.
Under law codes in Colombia, you may hire an independent contractor for any legal services in the country. While a written contract is not legally stipulated, it’s important to create a formal agreement to set expectations for both parties. Outline these key service terms with your contractor:
- Pay rates and arrangements
- Scope of services offered by the contractor
- Termination conditions
- Length of the contract
- Nondisclosure agreements (NDAs), if needed
3. Know how to work with independent contractors.
After establishing your service agreement, you can introduce your contractors to key players in the project, company systems they may need to use, and essential workflows. Independent contractors should not receive the level of control or supervision that employees do – they are generally free to perform the work according to their own schedule and methods.
How to pay independent contractors in Colombia
As distinct business entities, independent contractors cannot be on your employee payroll. Instead, you must pay them separately and find a secure way to provide compensation internationally, if applicable.
Payment arrangements will depend on the terms established in the service agreement. Many independent contractors will request a lump sum for completing the specified project, or payments upon completion of certain milestones, but there may be other stipulations to work with.
Terminating independent contractors
Labor laws in Colombia are not applicable to the business relationships you may have with independent contractors. Standard practice is to end the services on a set date or at the conclusion of a project. You and the contractor have the flexibility to extend or terminate the contract as needed.
At the same time, you should consider including logistics and terms around termination in the written agreement in case you need it in the future. It is recommended to include a clause in your contract about both parties’ right to end the service agreement or extend it further.
Turn to G-P when hiring independent contractors in Colombia.
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.