Identity verification is of the utmost importance when it comes to onboarding new talent within an organization. The people who work for you — whether they do so full-time or on a limited, contractual basis — are generally privy to some of your company’s trade secrets and internal processes. For tax and documentation purposes, there is a very good reason to ensure those who work for you actually are who they say they are.
How is a Gig/Contract Worker Defined?
Independent contractors or “gig workers” are people you pay for services who are not your employees. As far as the IRS is concerned, the two are synonymous and neither of these types of workers need their taxes, etc., withheld by the companies they work for.
These include freelance laborers and any professionals working for you as members of other companies for a one-off project or a short period of time. Unlike independent contractors, gig workers are less likely to provide their own legal terms in custom contracts before they begin working for you.
Even consultants and legal representatives can count as contract workers, among many other professionals across a variety of industries. These workers own their own businesses, even as sole proprietors.
This makes most tax and documentation requirements for their labor their responsibility. With that said, there are still requirements on your part for documenting who they are and how much you are paying them.
Documents Required to Hire a Gig or Contract Worker
The documents you will need to obtain to begin working with a gig or contract worker differ significantly from those needed for employees (such as using form W9 instead of form W4). Here are the documents you should obtain from workers who are not your employees:
- W9 (IRS form) – You will need to have this form filled out to track money paid to a given contractor when filing with the IRS. This form is strictly required of your business if you pay a specific contractor more than $600 in a given tax year.
- Contract – A contract signed between your company and your contractor of choice should explain in unambiguous terms all details regarding the general scope of the project they are to complete, the length of time they will be contacted by your business, billing information, and confidentiality matters, among other things.
- Payment Information – As mentioned in the point above, establishing payment procedures ahead of time is important. Everything including amount paid, scheduling, and the method money is delivered should be accounted for.
- 1099-NEC (IRS form) – This form is intended specifically for reporting nonemployee compensation to the IRS and is meant to be shared between the business and the contractor as two separate copies.
Importance of ID Verification
Ensuring that the contractors you employ are who they say they are is vital to keeping up with tax reporting obligations. If applicants submit fraudulent identification, you may not realize until it’s too late. You may inadvertently end up paying for a contractor who lacks the skills they claimed to have, since they used someone else’s credentials when applying. In a worst case scenario, you may have even hired a fraudster who now has access to company data and credentials.
A solution like Intellicheck can verify the applicant’s passport or state ID in seconds. Using our system, you can feel confident knowing that the contractor’s documents are legitimate and match your applicant’s identity.
Make the Process Easier
Intellicheck makes the identity validation process easy and can be deployed in a little as an hour. You can use existing mobile phones or tablets — no new equipment is needed.
A full-featured API is also available for deeper integrations, allowing you to insert identity verification procedures seamlessly within your existing onboarding process. Intellicheck offers global document validation with subsecond results on individual checks. Best of all, Intellicheck’s accuracy is second to none with a success rate that even law enforcement agencies have come to trust.
To truly leverage the ease of hiring gig or contract workers as opposed to employees, make the onboarding process a simple one. Get in touch with Intellicheck today and start verifying your contract workers!