Whether you need temporary help on a new project or you’re looking to hire someone based on a certain skill set, you may find what you need by hiring a contract worker. But while contractors may seem like a convenient, low-cost alternative to full-time help, hiring a contract worker could lead to potential legal risks for your business, especially if you neglect to do your due diligence.
Below, five legal experts and executives from Forbes Legal Council share the common mistakes business owners make when hiring contract workers and how they can avoid putting their businesses at risk.
From top left to right: Victor Cardona, Lawrence Buckfire, Brian Draves, Kelsie Ackman, Tracy Gray. Photos courtesy of the individual member.
1. Not Starting With An Intellectual Property Agreement
If your outsourced project is a creative one, make sure that you have all your IP ducks in a row at the time of the engagement. An outside contractor may be considered an inventor if he or she adds something new and non-obvious to your project. An inventor owns his invention at the time of creation so make sure there is an early obligation to transfer IP rights to you. Copyright law is similar. – Victor Cardona, Heslin Rothenberg Farley & Mesiti PC
2. Failing To Notify Your Customer
A legal risk when hiring an outside contractor is the potential liability to your own company. If the outside contractor negligently or intentionally harms your customer, your business may be liable. Make sure that the customer understands and agrees to the use of the outside contractor. Make sure the contractor has insurance to defend and indemnify your business in the event of a claim. – Lawrence Buckfire, Buckfire & Buckfire, P.C.
