Employees and Freelancers

Increasingly in the information age, companies need to both maintain flexibility and keep costs down.  Retaining a small core staff of employees, and using self employed contractors and freelancers to scale up as extra resources are needed is a common way to keep overheads down.  Though not a good fit for every business, the popularity of services like Amazon’s Mechanical Turk, Elance, PeoplePerHour, and oDesk to name but a few, is testament to how effective this strategy can be.

So, enlisting the help of freelancers is a great way to increase capacity without the expense of having someone on the payroll.  However, if you don’t manage the relationship effectively from a legal perspective you could actually get far less than you bargained for.  This is down to the fact that the distinction between employee and freelancer relationships has important implications when it comes to ownership of intellectual property.

Some common reasons to engage freelancers are:

• To design graphics for your promotional materials
• To develop your website
• To write content for your blogs, newsletters, magazines, newspapers
• To produce videos or music
• To carry out research

There are  many issues to consider to avoid some common problems.  

The way to address these and protect your business, as well as its intellectual property, is to use appropriate legal agreements.

Also, brand protection issues should be considered.  For example, with some of the top social networks now reaching over a billion people each month, you ought to consider whether the behaviour of your employees online could put your reputation in jeopardy.  An effective social media policy will help employees to understand the risks, prevent leaks, unnecessary litigation, and fines for breaches of data protection law.  Crucially, it will also help your employees to stay on-message, and project a positive, consistent image to the public. 

Critical in many situations involving employees or freelancers is confidentiality, if you will need to give them sensitive information about your business. As innocuous as it might seem to them, a lot of the material they come into contact with could be very valuable.  For example, contact and customer lists, market research, the way you solve technical problems, the lowest prices you are prepared to offer, your weaknesses compared to competitors and a multitude of other information.  What would the impact be on your business if a supplier of yours discovered they are your only source for a key component, or that they are by far the cheapest?

Making sure that obligations of confidentiality are imposed at the right time, on the right people, and to the right extent is key to long term success.

What next?

If you are taking on employees or freelancers make sure you get the right legal help.   Call us on +44 (0)20 7700 1414 or if you prefer send us an enquiry using the form below.