---
title: Companies Should Avoid These Four Mistakes Involving Their Independent Contractors
description: Adding independent contractors is all about increasing speed and versatility of your team. But you could add risk and headaches on the backend if done incorrectly.
image: https://blog.greenlight.ai/hubfs/reg%20and%20tax.png
---

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# Companies Should Avoid These Four Mistakes Involving Their Independent Contractors

[Jason Posel](https://blog.greenlight.ai/blog/author/jason-posel)

 Oct 2, 2020 12:25:51 PM

![reg and tax](https://blog.greenlight.ai/hs-fs/hubfs/reg%20and%20tax.png?width=629&name=reg%20and%20tax.png)

## 1. INCORRECTLY CLASSIFYING YOUR INDEPENDENT CONTRACTORS

Classification is a hot topic when it comes to hiring variable workers, and for good reason. Accidentally misclassifying and incorrectly paying members of your workforce could result in criminal liability.

## 2. HIRING REMOTE WORKERS WITHOUT TAKING LOCAL REGULATIONS INTO ACCOUNT

![automatin and analytics](https://blog.greenlight.ai/hs-fs/hubfs/automatin%20and%20analytics.png?width=305&name=automatin%20and%20analytics.png)

No matter where your company is based, if you hire a remote worker across state or national lines, you have to comply with local regulations. Your business will need to be registered in that area, you’ll have to file taxes, your insurance requirements could vary, and so on.

## 3. NOT COVERING YOUR INSURANCE BASES

If you’re not providing insurance coverage, you should require proof that your independent contractor has their own. They should have general liability insurance and possibly errors and omissions insurance, depending on the type of services they provide.

## 4. HANGING ON TO DISPARATE TOOLS & SYSTEMS

In an ideal word, your entire business could function on one platform or system in which streamlined processes and data could easily flow across departmental lines. This disjointed structure means that no one has a comprehensive view of headcount or spend, and certainly not of risk.

 

| ## Download the full guide to read more about these four common mistakes: [![Instant Download](https://no-cache.hubspot.com/cta/default/6860163/a9bd169a-3bb1-4a3f-9a71-9bd2408dac12.png)](https://cta-redirect.hubspot.com/cta/redirect/6860163/a9bd169a-3bb1-4a3f-9a71-9bd2408dac12) |
| --- |

 

## Read On

### [4 Compliance Tips for Onboarding and Paying Your Contract Workforce](https://blog.greenlight.ai/blog/4-compliance-tips)

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