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Contracting the Time Card-Resistant Service Provider

Every once in a while, we'll run into the online rant against the use of a webcam enabled or screen-capture time card in outsourcing. Service providers will claim, "It's an invasion of my privacy," "I'm a freelancer not an employee," or, "I should be trusted why don't they trust me to work on my own!?"

One service provider we encountered went so far as to claim time-cards put the provider in the position of an employee, and therefore entitles the provider to health benefits and access to things like 401K plans.

As a time-card using service provider, we thought we'd address these concerns in an effort to not only squelch some of the misinformation and privacy fears floating around the Internet, but also give outsourcers advice on how to contract the time card-resistant service provider.

Why the Time Card Is a Requirement

Ease resistance to using a time card by defending your decision to require one. Yes, some jobs require the use of a time-card. Examples: You need a per-hour account of your outsourcing endeavor. You might need to outsource a job on your employer's behalf, for example, and your boss will only pay for services by the hour. Or, you might need to record the time spent on an outsourcing project as part of your ammo against an IRS audit.

Whatever your reasons are, explain them to the time card resistant service provider to help ease unfounded suspicions and doubts of trust.
Some outsourcers pay by the hour to compare their outsourcing costs to their in-house hourly costs as well.

Webcam Shots

Personally, we don't like working with a time-card that takes webcam shots, but we understand why it could be required for some jobs. One example that comes to mind is the job that could be automated with some sort of software or script. A worker who's crafty with code could manipulate his or her computer in such a way that it gives the impression s/he's working when s/he may actually be sleeping or away from the machine.

Since you're not paying for an automated script or software program, you have every right to expect the service provider that you hired is actually doing the work. The only way to validate that expectation is to require webcam. The unfortunate part about this requirement is that it could displace a service provider's comfort level so much, the project could suffer from delays, or worse, excuses for not working at all.

If you're absolutely sure your project cannot be automated through code, remove this requirement to make your provider more apt to comply with screen capturing.

Screen Capturing

The benefit of using a screen capture-enabled time-card is that it displays visual evidence of work. A few service providers don't like it because it could change the way they're used to working (which consequently, brings up the issue below). Many freelancers multi-task. They may check their email or even do a little social networking between individual job tasks.

There's nothing wrong with that -- we all take a few mental breaks here and there. But as an outsourcer who is required to monitor the hourly progression of your project, you are well within your right to expect your service provider won't waste the time you're paying for on tasks that aren't essential to your project.

Employee Benefits

Because a webcam-enabled or screen-capturing time card could change the way service providers are used to working, some people are under the misconception that they become employees rather than service providers while using it. They may even cite the IRS's definition of the employee as evidence, however there are significant problems with this.

Below, we analyze each aspect of the employee definition and explain why the use of a webcam-enabled or screen-capturing time card -- a tool -- does not turn a service provider into an employee.

According to the IRS:

  • 1. Employees are hired with the expectation that the relationship will continue indefinitely. The use of a time card does not affect nor support this expectation.
  • 2. Employees provide services that are a key aspect of the business. The use of a time card does not contribute to key services, the type of work performed does, and because a provider could provide these key services with or without a time card, the device is a moot instrument.
  • 3. Employees receive instructions, training, and evaluation. The use of a time card does not require special instructions, training, or evaluation exclusive to a specific job or outsourcer. After a provider learns how to operate a time card for one job, that knowledge is reused for other (unrelated) jobs.
  • 4. Employees are told when and where to do the work. The use of a time card does not dictate when a service provider has to work or where to work. Service providers are free to work at any hour of the day, in any environment.
  • 5. Employees are told what tools or equipment to use. Aside from the time card itself, its use does not dictate what a service provider must use to complete a job. A writer, for example, is free to use his or her preferred word processor and a graphic artist is free to use his or her preferred illustration software.
  • 6. Employees are told what workers to hire or to assist with the work. The use of a time card does not affect nor support this activity.
  • 7. Employees are told where to purchase supplies and services. The use of a time card does not affect nor support this activity.
  • 8. Employees are told what work must be performed by a specified individual. The use of a time card does not dictate who must do what. It merely requires that the hired entity perform a job. That entity could be an individual, a team, or an entire company, and the use of a time card does not specify that "Jane Doe" perform 'Task Y' instead of "John Smith."
  • 9. Employees are told what order or sequence to follow when performing the work. The use of a time card does not dictate in which order a job must be performed. It merely records the order in which it is performed.
  • 10. Employees are guaranteed a regular wage amount for an hourly, weekly, or other period of time. The use of a time card does not guarantee an income. It simply proves that a provider worked on a project. The guarantee is a contract stipulation that's dependant upon the quality of work performed.
  • 11. Employees receive or have access to an employer's insurance, pension plans, paid vacation, sick days, and disability insurance. And employees are subject to income, Social Security and Medicare, and unemployment tax withholding. Both of these definitions are relevant only when the above definitions are relevant. As you can see, the use of a time card does not turn a service provide into an employee in circumstances 1 - 10, so there's no legitimate reason to assume it does in this last circumstance.

If you encounter a service provider who claims rights to employee benefits because of his or her use of a time card, explain why s/he's wrong with the information above. A lot of the hoopla over this particular resistance is based on misinformation that you can help correct.