a. How to Properly Document the Relationship
The most basic step to start a valid outsource relationship without incurring the risk of “contractor-in-disguise” is to have a clear agreement stipulating the purpose/ content of the service to be provided, and to detail any requirements/ instructions in either the contract or documented request to avoid daily contact regarding work requirements between the client and Independent Contractor.
The contract should also include provisions on how each party divides responsibilities and liability surrounding the work, such as the Independent Contractor bearing the fees for, and procuring the necessary equipment for carrying out the work, and if the Independent Contractor needs to rent equipment/ facility of the client, to have provisions that would make financial and business sense regarding such lease/ use of equipment.
b. Day-to-Day Management of the Relationship
All work related communication should be done in writing/ electronically through the person(s) acting as the point of contact, to avoid a situation where direct/ daily communication, which is difficult to distinguish from supervisory/ instructive relationship seen in employment relationships.
One of the recommended requirements when the Independent Contractor works at the same site as the client is to have someone in charge to be the contact person, divide the workspace and take measures to clarify the division and independence of the Independent Contractor. A Q&A issued by the administrative authority give examples such as while the client directly providing technical training/ guidance to the Independent Contractor is prohibited, certain circumstances would be allowed without leading to a determination of “contractor-in-disguise” if the Independent Contract needs to borrow equipment from the client and learn how to use such an equipment, to provide an introductory explanation to the workers of the Independent Contractor (under the supervision of the Independent Contractor).