a. How to Properly Document the Relationship
We recommend that the Independent Contractor agreement is reviewed by local experts in order to ensure that its wording does not reflect any subordination note and complies with local regulations.
In addition, it is advisable to enter into an independent service agreement in Spanish or in a double column format using English/Spanish languages due to the fact that in case of a conflict of a labor nature, a Court of Law will dismiss documents drafted in a foreign language.
b. Day-to-Day Management of the Relationship
In order to minimize risks of re-characterization, it is important to:
- ensure that services are rendered on a non-exclusive basis;
- avoid i) grant of corporate tools, ii) use of corporate email address, iii) correlative invoices, iv) fixed monthly fees, v) contractor’s participation in companies compensation/benefit policies, vi) compliance with fix working schedules, vii) control over the independent, and viii) orders or instructions (replace them for suggestions).
The mentioned tips will not prevent filing of a claim but, if met, they will contribute to set up a defense strategy and place the company in a better negotiation position in order to get a settlement.