Key Takeaways

  1. Contractor onboarding requires distinct steps from employee integration, focusing on legal compliance and specific operational procedures.
  2. Essential onboarding steps include gathering contractor information, signing legal agreements, and verifying tax and classification details.
  3. Effective contractor integration involves setting clear expectations, facilitating team communication, and providing necessary tools and training.
  4. Regular review and feedback are crucial for refining the onboarding process and maintaining a successful contractor-employer relationship.

Onboarding contractors is different from introducing new employees to the team—and for good reason. While both workers require structured, organized onboarding plans for successful results, each classification requires specific operational steps, legal processes, and tax-related responsibilities.

In this blog, we’ll cover what your HR team needs to know for contractor onboarding quickly, seamlessly, and compliantly.

Let’s begin with a list of action items.

The contractor onboarding checklist

For an efficient contractor onboarding process, you’ll need to complete a few key steps. Here’s a checklist for 1099 employees that will help HR organize the process:

  1. Gather key information: Gather contact details, payment information, tax, and immigration details you can reference back to as needed or use for future projects. Collect the contractor’s:- Full name
    – Phone number
    – Email address
    – ID or EIN number
    – CV, website, or references to past work
    – Ads they created to advertise their services
  2. Sign and save legal agreements: Have the contractor sign an agreement that includes:- The scope of work
    – Payment terms
    – IP rights
    – Confidentiality clauses
    – Tax information
    – Whether the company will provide training
    – Guidelines on internal resources
    – A section that sets expectations for the working relationshipNote: have a legal team review the contract to protect your company from liability.
  3. Collect essential documentation: Include NDAs, noncompete agreements, and relevant tax documents.
  4. Review the contractor’s classification: Assess the contractor’s classification to avoid misclassification risks and set up regular reviews to maintain accuracy.
  5. Consider benefits: If the company offers benefits, ensure compliance with local laws to misclassification.
  6. Integrate contractors with the team and important processes: Introduce contractors to relevant teams and explain workflows, preferred communication channels, and points of contact.
  7. Grant permissions: Ensure access to necessary tools and software, while practicing the company’s privacy and security policies. Ask the IT team well in advance to grant 1099 employees access to software and equipment so technology isn’t a bottleneck for getting started.
  8. Get and provide feedback: Encourage open communication and collect feedback after they complete their first project to improve the onboarding process. Ask questions such as:- How could we improve the process?
    – What could we do better to ease the workflows?
    – What was missing from the contractor’s work? What improvements could be made?
    – What could they do differently next time?
  9. Reiterate expectations and success metrics: Set clear expectations and success metrics, including KPIs and progress checks.
  10. Set up automated payments: Implement automated payment systems for efficiency, especially when dealing with dozens of contractors who prefer different currencies.
  11. Document the process: Keep records of the onboarding for your HR and legal teams for future reference or in case you need to optimize the process as teams across the company hire contractors.

Note: Larger organizations and enterprises may want to standardize this checklist and run it by their legal team to implement across the company and ensure teams cover all bases.

Covering legal and compliance aspects when onboarding 1099 employees

Legal and compliance is top priority for any business that aims to remain above board and avoid IRS audits or penalties for noncompliance. There are a few legal obligations you will need to fulfill for 1099 employees including:

Contractual elements: Include standard work for hire templates for different project types, customizable clauses like NDAs, and details like work scope, pricing, and deadlines. Larger enterprises may want to consult their legal team when dealing with contracts in large amounts to remain compliant with local laws.

Tax Compliance: Ensure the finance/or HR teams collect and file the proper tax documentation, specifically, Form W-9 and Form 1099 for U.S. contractors.

Background Checks: Verify the contractor’s qualifications, previous work, and references to ensure credibility and skill fit. Keep these records on file in case of audits, accidental misclassification, or in case other teams require a skilled contractor.

Practical and operational steps in the contractor onboarding workflow

Contractors aren’t employees, but they are still part of the team. Implement the essential steps below for the contractor onboarding process for smoother communications and a stronger working relationship.

Set up the payment process: Establish and communicate payment methods and schedules, uncovering which methods require processing fee and internal registrations. Enterprises may want to consider cross-border payments as a convenient option.

Welcome Package: Create a digital welcome package containing a company overview (including workplace safety and policies), project information, training materials, communication channels, key contacts, and access to necessary tools. Provide an overview of the team’s members for a personalized touch.

Hold a kick-off Meeting: Conduct a kick-off meeting to address questions and clarify project objectives and processes. During the kickoff meeting, work out any kinks such as programs or software contractors can’t access or give a live tutorial for how to use them.

Communicate performance standards: Provide concrete examples of good work explaining why the reference achieved quality standards, benchmarks, and goals. Give the contractor personalized KPIs to work towards so you can assess their progress.

Start a feedback loop: Regularly ask for contractor feedback to develop trust, maintain engagement, and improve operational efficiency. Set up weekly, or bi-weekly meetings to stay on the same page.

What are the contractor misclassification risks?

The contractor should feel part of the team, but be careful not to overstep the line and treat them as an employee. This will open the business up to misclassification risks.

Misclassification is when a business onboards contractors and treats them as employees. When a business misclassifies a contractor, it’s usually because the employer exerts control over how, where, or when the work is done.

To avoid misclassification and future legal obstacles, businesses will need to maintain a certain relationship with the contractor and pay attention to aspects such as training, tool access, and managerial behaviors.

Contractors must be able to control the scope of their work and come to jobs prepared with the right training and skills. Additionally, contractors must supply their own tools for the job, as giving contractors resources and training can increase the risk of misclassification.

Independent contractor payments

The contractor agreement will define how to pay contractors, but a large part of the payment process is paying on time. The contractor payment process should include information on fees and exchange rates so the contractor understands where their money is going.

Making payments on time and in the correct amounts will help ensure the success of the collaboration. Contractors will feel more valued, have a better relationship with the manager, and guarantee the company is compliant and fulfilling its end of the deal.

Create a well-oiled onboarding process

A well-planned, thorough contractor onboarding workflow is essential for a successful contractor-employer relationship and to protect the company from noncompliance risks. Gather input from legal experts to cross all your “ts” and prevent legal liability. Clearly communicate each process, expectations, and roles to contractors and make any amendments to build an optimal work process and open doors for future collaborations. Schedule a demo to learn more.


What do I need to onboard a 1099 employee?

Employers will need tax forms such as Form W-9 and Form 1099 along with nondisclosure agreements, IP rights, and an independent contractor contract. The contract should spell out each party’s responsibilities and define the relationship.

You will also need the contractor’s basic information (including their EIN and email), as well as samples of previous works. Finally, you will need an onboarding process that introduces the contractor to the team, its goals, standards, and access to important software.

How do I protect myself when hiring an independent contractor?

A legal team can advise you on creating an independent contractor agreement that outlines the working relationship, the contractor’s personal details, and party’s behaviors to lower risks of misclassification. Additionally, managers will need to stay vigilant about how they treat contractors.

For instance, contractors must have control over when, how, and where they complete work. Businesses must be careful not to provide carte blanche access to company materials, training, and equipment to avoid treating the contractor as an employee.

What are the stages of employee onboarding?

The stages of employee onboarding are:

  • Pre-onboarding
  • Orientation
  • Training
  • Integration

Document each stage for future reference and to streamline onboarding for your organization. Communicate with contractors throughout each stage and leave room for questions. Lastly, review and revise the onboarding strategy to continue providing a great experience.

Who owns employee onboarding?

Various teams are involved with employee onboarding. IT is needed to grant access to software, legal can check contracts to ensure they follow laws and regulations, HR can provide insight on which tax forms you’ll need, finance will handle payment, and more.

Typically, though, the team hiring the worker is mainly responsible for carrying out onboarding. They will need to answer any questions, review team goals, introduce the contractor to team members, and introduce projects.