Why do you need a Services’ Contractor?

There are several good reasons for getting a service contractor, foremost of which cutting on payroll costs if you have mature company benefits and you cannot afford to provide them to temporary personnel.

In the Philippines, contractors are better known as manpower agencies, which is a misnomer (a wrong label) because contractors are supposed to provide services or implement a job contract. Solely providing manpower would be illegal.

So what would make contracting legal?

Two characteristics make for legitimate contracting. First, the contractor must provide or implement independent services to a principal (i.e. the client). Second, the contractor must be sufficiently capitalized– that it should have its own equipment, machinery, materials, etc. needed to implement or provide those services.

In case you have “illegal” contractors now, is there anyway you could straighten it out?

There would be several ways… You and your contractor may focus on the control test (part of tests to determine if there is an employer-employee relationship) to determine if you control the behavior of these  ”contractual” employees.  The control test is part of the set of employer-employee relationship tests to determine whether the personnel within your premises are employees of your contractor.  Or the same may sue as they may be your employees.