As your company grows, specialized projects may call for outside expertise. Hiring independent contractors in Switzerland is one way to gain the skills and experience to meet these needs without scaling beyond your company’s capacity.
Hiring independent contractors in Switzerland
Before hiring independent contractors in a new country, companies need to understand what this worker type entails as well as other responsibilities.
Independent contractors vs. employees
While employees are a part of your company, independent contractors function as self-employed professionals who provide services. This means that employers are not responsible for withholding taxes or offering benefits to independent contractors. The main characteristic that distinguishes an employee from an independent contractor is that an employee is subject to subordination by the employer.
Penalties for misclassification
When hiring a new worker, classifying them correctly is paramount. Companies could face legal and financial repercussions for misclassifying an employee as a contractor. Additionally, you may be required to issue back pay for all benefits the employee earned over their duration of service as well as the applicable social security contributions.
How to hire independent contractors in Switzerland
Some key distinctions separate the contractor interview from employee hiring. For a successful contractor hiring process, follow these 3 basic steps.
1. Carefully conduct interviews.
Because contractors offer extensive field expertise and project-specific qualifications, you’ll want to focus on those areas in interviews. Avoid discussing personality to assess cultural fit, as these concerns aren’t a priority as they are for employees. Your service relationship with a contractor is a business-to-business transaction, so the focus should be on their skills and experience.
2. Create a service agreement.
Developing a service agreement is best practice when working with contractors, though it’s not a legal requirement. The agreement should cover these fundamental terms:
- Pay rates and arrangements
- Services the contractor will provide
- Length of the contract
- Termination conditions
3. Introduce necessities.
Ensure the new contractor has all the necessary resources to complete the project. In-depth training may imply a level of subordination that does not apply to contractors; however, you can introduce them to project managers, explain company workflows, and ensure they have access to the points of contact and tools they need.
How to pay independent contractors in Switzerland
Independent contractors are not on the company payroll, and they will most often provide their own invoices to receive payment. Ensure you know the restrictions for sending money internationally.
While companies don’t need to provide tax contributions or benefits, you’ll still need to meet all payment conditions outlined in the service agreement. These terms may include payment schedules and rates.
Terminating independent contractors
Contractors typically work for a set duration of time or until they complete a project. As a result, termination of services is usually straightforward.
The best practice is to establish termination protocols in the service agreement to help protect your company from potential legal issues. That way, if you need to end the working relationship unexpectedly, you’ll have clear guidelines to reference.
Turn to G-P when hiring independent contractors in Switzerland.
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.