Your Contractor Compliance Checklist: Essential Steps to Keep You Compliant When Hiring Contractors

When it comes to hiring interim or contract workers, speed and flexibility are key – but compliance is critical. 

The risks of getting it wrong? Costly fines, reputational damage, and operational disruption. The good news? Staying compliant doesn’t have to be complicated – not when you have a clear plan and the right support. 

At Owen Daniels, we’ve been delivering compliant contract recruitment across STEM industries for over a decade. Here’s our go-to compliance checklist to help you stay on the right side of regulations when hiring interim talent. 

1. Verify Worker Status 

The first step is understanding whether your contractor is truly self-employed or working through a limited company, umbrella, or agency. This determines your obligations around tax, NI, and employment rights. 

Top tip: Misclassification can lead to serious legal and financial consequences. Seek advice if you’re unsure. 

2. Understand IR35 

If you're hiring in the UK, IR35 legislation is vital. It determines whether a contractor is genuinely self-employed for tax purposes when operating through a limited company. The rules differ depending on whether you're a small business or a medium/large private company. 

We give our clients the expertise and tools to assess IR35 status and minimise risk – so you can hire with confidence. 

3. Contracts & Documentation 

Ensure all contracts are clear, up-to-date, and legally sound. This includes agreements with the contractor and any third parties involved (like umbrella companies or agencies) to ensure risk and liability is in the right place. 

At Owen Daniels, we provide robust documentation and back-office support, so everything is watertight from day one. 

4. Right to Work Checks 

Just like with permanent staff, right-to-work checks are a legal requirement. Ensure documentation is valid, stored correctly, and rechecked when necessary. 

We carry this out for every interim placement we manage – giving you full peace of mind. 

5. Insurance & Liability 

Professional indemnity, public liability, and employer’s liability (where relevant) are essential for protecting your business and your contractor. Make sure policies are in place and up to date. 

6. Stay Up to Date with Regulations 

Contractor compliance isn’t a “one and done” task. Legislation changes regularly – from tax rules to employment law. Partnering with an experienced provider means you stay ahead without having to stay up all night reading HMRC updates. 

7. Choose a Trusted Partner 

With over 12 years in the STEM market, our clients trust us to deliver contractors who are qualified, available, and fully compliant – backed by our expert compliance and payroll team. 

From urgent project support to ongoing workforce solutions, we’ve got your contractor hiring covered. 

Need support with your contractor compliance? 

We’re here to help – whether you need a quick placement, long-term contractor support, or guidance through your compliance processes. 

Talk to us today about getting it right from day one.