Did you know that there have been 6 million people who joined the gig workforce since 2010?
Gig workers are also known as independent contractors or freelance workers, they can work with a variety of businesses.
If your company works with gig employees, you must understand the payroll process for them.
Continue reading to discover how to handle employee checks for gig workers at your business!
Agree On Working Arrangements
The first step you must accomplish before focusing on employee checks is the working arrangements.
Depending on the type of gig worker or contract employee that you are working with, you will have to identify general guidelines. Gig workers have experience working with a variety of companies and may be used to certain wages. Determine what their cost is and the work that will be included.
Agreeing on the working arrangements is important and should be written out on paper. This will act as a contract for work.
Classify the Gig Worker
Once you have created a contract with your gig worker, you can then identify what their employee classification is.
The US Department of Labor has set standards and classifications for each type of employee. When filling out tax documents, you must know the correct classification of your gig worker. By submitting an IRS form SS-8 you can figure out information about the employee’s status and purposes of federal taxes.
Human resource departments can often help with getting the classification of a gig worker.
Discuss Method of Payment
While agreeing on working arrangements, payment will likely be one of the topics that come up.
There are many forms of payment that you can consider for your gig workers. Direct deposit, paper checks, and PayPal are the most frequently used methods. Other companies are beginning to utilize Venmo and money transfer applications to get the job done.
If you are paying with physical checks, consider using this check stub maker to document payments. A payroll system can also help you keep track of all the information!
The gig industry is ever-changing and fast-paced compared to most businesses.
By frequently communicating with your gig or contract workers, you will help establish a relationship and trust. These elements are important with gig workers because they can come back and supply more work if you like their accomplishments.
By helping support your gig workers, you are also supporting your own business.
Pay Your Workers
Depending on your payment arrangements, you may pay your gig worker every week or after they complete an assignment.
It is crucial that you fully document all of your payments to gig workers. This information is important during tax season when you are trying to get accurate numbers. At the end of the year, you will have to complete tax forms showing how much you spent.
Same your documents for at least 7 years before getting rid of them, even for gig workers.
How to Handle Employee Checks for Gig Workers
There are many things to consider when handling employee checks for gig workers.
Since gig workers are contract employees, they have special accommodations for getting paid. The most important thing to do is classify your gig worker to determine the payroll process. This makes your job easier.
Don’t be afraid to build a relationship with them and keep frequent communication, this will help prevent any issues from arising.
Be sure to check out our blog for more articles about the gig workforce and how you can accommodate it in your business!
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