8 Red Flags to Look Out For When Hiring Digital Freelancers

Whether it’s crafting copy, coding websites, or managing tasks, hiring digital freelancers for your business can be a huge game-changer. But before you go lookin’ for that next freelance ninja...

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8 Red Flags to Look Out For When Hiring Digital Freelancers

Whether it’s crafting copy, coding websites, or managing tasks, hiring digital freelancers for your business can be a huge game-changer. But before you go lookin’ for that next freelance ninja...

Image of an iPad showing the legal guide.

FREE ONLINE Business Legal GUIDE

Get a quick crash course in the laws that affect your business and other ways you can protect yourself from legal headaches.

Whether it’s crafting copy, coding websites, or managing tasks, hiring digital freelancers for your business can be a huge game-changer. But before you go lookin’ for that next freelance ninja to help you with your business, there are a few things we recommend you look out for that could save you some major legal headaches down the road.

This post is all about spotting those sneaky red flags when bringing freelancers on board. We’ll cover what to look for when it comes to an independent contractor’s contract and how to make sure all the important stuff is covered. Let’s dive in!

What We'll Cover...

Red Flag #1: Unclear Ownership of Work

Five people in business attire standing in a row, each holding a lightbulb above their heads. Topic: hiring digital freelancers

Picture this: You’ve found the perfect digital freelancer for your next big project. You’re all set to go, but wait – who actually owns the work once it’s done? 

This is where things can get tricky. 

It’s super important that the agreement between you and a contractor clearly states that you, the client, own all the work created once it’s completed and paid for. 

And no, not all contractors grant you ownership of the work they do for your business automatically. (Shocking, we know.)

Why does this matter? 

Well, imagine creating a fabulous new website or a killer marketing campaign, only to discover you can’t use it as you please. Not cool, right? 

This can and absolutely has happened to online business owners

Sometimes, contractors bake into their contract that they don’t transfer rights to the completed work until they’re fully paid, which is fair.

You wouldn’t want to give away your hard work without being paid for it, right?

Whatever the case, it’s important to make sure who owns what and when is crystal clear to avoid any headaches later. Remember, when hiring digital freelancers, clarity is king – especially when it comes to ownership!

Red Flag #2: Vague Scope of Work

Image of five people each having their hands on their chin with a pensive expression. Background has five columns each a different color. Topic: hiring digital freelancers

Here’s the deal: When you’re hiring digital freelancers, you need a solid scope of work in your contract that leaves nothing to be guessed at. 

Everything you want them to do (or NOT do) should be clearly stated so you’re both on the same page.

Why? 

Because “design a website” or “write some blog posts” is like hiring a chef and telling them to “make something tasty.”

They might be great at making salmon mousse, but like Joey Tribbiani, you might find whipped fish a little nauseating and not to your taste. 

A vague scope can lead to misunderstandings, extra costs, and a lot of “I thought you meant…” conversations.

And no one needs that kind of headache.

So when it comes to your expectations and the scope of the project, make sure your contractor is very specific about what is included. And be clear about what you want (e.g., the number of pages for a website, word counts for articles, specific tasks for a virtual assistant, what you don’t want them to do, etc.). 

This way, everyone’s on the same page, and you get exactly what you need. Trust us, a little clarity goes a long way in the world of hiring and contracts.

Red Flag #3: No Confidentiality Clauses

Image of document on a clipboard with pen. The document reads "Confidentiality Clause". Topic: hiring digital freelancers

Now, let’s talk secrets — business secrets, that is. When hiring digital freelancers, you’re sharing a piece of your business world with them and some stuff needs to be kept on the down-low. 

This could be anything from customer data to your next big marketing strategy.

Without a confidentiality clause in your agreement, you’re basically leaving your business diary open on the park bench! 

A confidentiality clause is more than just a pinky promise in the digital world; it’s a legal agreement that ensures that your freelancer keeps your sensitive info under wraps. 

So if the freelancer you’re eyeballing doesn’t have this in their contract, you might want to use your own contract or look somewhere else for help.

Red Flag #4: Absence of Termination Clauses

Image of computer keyboard buttons. One button is blue with text that reads "Termination Clause". Topic: hiring digital freelancers

Okay, let’s get real for a moment. Sometimes, despite best efforts, things don’t work out — and that’s okay. This is why, when hiring digital freelancers, it’s crucial to have a clear game plan for saying “It’s not you, it’s me.” 

That’s why every contract you have with a contracted freelancer should include a termination clause. No exceptions. 

Trust us, we know what it’s like when you hire a freelancer that seems like a dream come true only to wake up to a complete nightmare of an experience. 

When that happens (and it’s not too uncommon), you want to make sure you have a “break glass in case of emergency” exit plan. 

Your contractor’s termination should clearly state how and when either you or the freelancer can end the contract. Maybe it’s a two-week notice or a specific condition like missing deadlines. 

Whatever it is, make sure it’s there. (Keep in mind how long you’d want to stay working with the contractor after things go sour… so maybe shoot for a shorter time frame.)

Without this, you might find yourself stuck in a working relationship that isn’t, well, working. Or worse, it could get messy with disputes over payments and unfinished work. 

Yikes! 

So, if your freelancer doesn’t include this in their contract, it’s time to renegotiate or find a better option that includes a well-defined exit strategy should you need it.

Red Flag #5: Lack of Indemnification Clause

Two hands exchanging handful of $100 bills. Topi: hiring digital freelancers

Next up, let’s go over what an indemnification clause is and why it’s a MUST when hiring digital freelancers. 

An indemnification clause is there to protect you if the freelancer’s work ends up causing some legal headaches for you. 

For instance, say a freelancer uses an image that they didn’t have the rights to, and now you’re facing a copyright claim. 

Not fun, right? 

An indemnification clause in your contract means the freelancer will be responsible for sorting out these issues and any costs involved. 

It’s like having a “You break it, you fix it” policy built into your contract. 

Without this clause, you could be left holding the bag for mistakes you didn’t make. So, make sure your agreements are shored up with this clause and that it provides adequate protection for you.

A good freelancer will take ownership of their mistakes, so keep an eye out for indemnification clauses that just act as scapegoats to get them out of trouble!

Red Flag #6: No Liability Limitations

Man blurred in background while the foreground shows his hand holding out a post-it that reads "No". Topic: hiring digital freelancers

Liability limitation clauses add some ground rules between you and your contractor. They tell your freelancer, “Here’s what you can and can’t be held responsible for.” 

Imagine a scenario where a small error on their part leads to a big problem for your business. 

Without liability limitations, things could escalate to you footing a hefty bill, and nobody wants that. This clause keeps things fair and square, setting clear boundaries on the extent of financial responsibility. 

It’s about protecting both your business and the freelancer. So, make sure your contracts have these boundaries clearly marked.

You might be wondering what the difference is between limitation of liability and indemnification. Good question!

Here’s a quick explanation:

An indemnification clause requires the party who screwed something up to pay the expenses from a dispute with a third party, while a limitation of liability covers what happens in a dispute between you and the freelancer. 

Red Flag #7: Missing Dispute Resolution Process

Image of four people with three of the people arguing with the other person while business documents are scattered over the desk in front of them. Topic: hiring digital freelancers

Let’s face it, even in the smoothest collaborations, disputes can pop up. 

That’s why, when hiring digital freelancers, having a clear dispute resolution process in your contract is as crucial as having a good Wi-Fi connection for an online business. This is your roadmap for navigating bumps along the way. 

It could be something as simple as agreeing to a chat to sort things out, or something more formal like arbitration or court.

Without this, a small disagreement over a project could escalate into a major issue, taking up your valuable time and resources. 

Think of this clause as your “keep calm and resolve” plan. It ensures that if things get a bit rocky, you have a clear, pre-agreed path to follow, keeping your working relationship and your project on track.

Red Flag #8: Payment Terms Ambiguity

Image of four $100 bills placed behind a notepad with text that reads "Payment Terms". Next to notepad is calculator and magnifying glass. Topic: hiring digital freelancers

Now, onto a topic that everyone perks up for: money. Clear payment terms are the heartbeat of any freelancer agreement. 

When you’re hiring digital freelancers, being wishy-washy can lead to unexpected and unpleasant surprises. 

If a freelancer, even a well intentioned one, says something like, “The project will take about a week and you can pay me whenever you can…” red flags should start going up.

Even if they’re being sincere, you’ve got to be vigilant and know how ambiguity like this can lead to some nasty fallout later.

You want to be crystal clear (notice a theme here?) about how much, when, and how the freelancer will be paid. 

Will it be a flat fee, hourly rate, or based on project milestones? 

And let’s not forget about late payment policies and reimbursements! 

Unclear payment terms can lead to misunderstandings, frustration, and stalled projects.

So, make sure your contract spells out the dollars and cents and all the other details explicitly. 

It keeps the relationship smooth and professional, ensuring everyone knows what to expect and when.

The Importance of a Comprehensive Agreement

Group of people in business attire all looking at the person in the center who is signing a document. Topic: hiring digital freelancers

Ultimately, the BEST way you can protect yourself when hiring digital freelancers is getting a well-drafted and comprehensive independent contractor agreement in place.

A well-crafted agreement that addresses all these red flags does more than just protect your business; it sets the stage for a clear, fair, and productive collaboration. 

It’s about finding that sweet spot where your interests and those of the freelancer align perfectly. This balance ensures that while your business is protected, your freelancer also feels respected and valued.

When you do this, you’re more likely to find contractors you want to work with again and again! 

In the digital freelancing world, a thorough and fair contract is the foundation of trust and success. So, take the time to get it right, and you’ll pave the way for a partnership that can bring great results to your online business.

Need help getting a rock-solid independent contractor agreement in place? That’s where Plainly Legal™ can help!

Plainly Legal™ users get access to all of our contractor agreements inside of our Legal Doc Generator! 

If you’d like to hire a virtual assistant to help you in your business or some other kind of contractor, we’ve got you covered with agreements that address all of these important areas.

Click here to start your Plainly Legal™ subscription and feel confident you’re covered when hiring your next helper.

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