SPI Independent Contractor Hiring Policy

THE SPI VICE PRESIDENT RESOLVES THAT

SPI may from time-to-time require the specialized expertise of independent contractors to carry out tasks for the organization. Accordingly, SPI has established this Independent Contractor Hiring Policy to establish guidelines and procedures for engaging and managing independent contractors at the organization in a clear and consistent manner.

This policy is also intended to facilitate SPI’s compliance with labor laws and tax regulations with respect to independent contractors and to mitigate legal and financial repercussions associated with contractor misclassification. This policy aids in maintaining operational efficiency by clarifying the circumstances under which it is appropriate to hire contractors, based on the nature of the work and the company's needs. 

Hiring Process for Contractors

Guidelines for Contractor Hiring

SPI maintains a structured process toward contractor hiring in order to ensure compliance and alignment with organizational needs. The following provides a general step-by-step overview of the process for hiring managers:

1. Identify the Need: SPI’s Vice President or their designee shall clearly identify and define the need for an independent contractor and the primary purpose for which a contractor will be retained.
2. Draft a Contractor Job Description: SPI’s Vice President or their designee shall create a detailed job description that includes the tasks to be performed, required skills, project duration, and deliverables.
3. Submit for HR and Legal Review: The job description and the need for a contractor are submitted to HR and the legal department for review to ensure compliance with labor laws and company policies. As part of this legal review, SPI shall evaluate whether the contractor to be engaged qualifies for classification as an independent contractor (as opposed to as an employee) under the applicable contractor classification standards in the jurisdiction where the work will be performed.
4. Obtain Required Approvals: The request for hiring a contractor must be approved as follows:
   • All contractors paid from SPI General Fund require the SPI Board’s explicit approval, which will happen in a regular meeting for the initial contraction, or by email for all further renewals or rate adjustments (henceforth “raises”).
   • Contractors working on behalf of associated project will have their due diligence handled by SPI Vice President, without the need of consulting the whole Board for approval.
5. Sourcing Candidates:
   • When SPI decides to engage an independent contractor, be it from General Fund or for an associated project, SPI will ensure the selection process is conducted in a manner that is consistent with its charitable goals and this policy.
   • For contractors paid from the General Fund, new selections will be posted in the SPI Board’s public repository after being approved in a public meeting, and shall also be announced in any SPI mailing list.
   • Contractors paid from the General Fund must always come from applications, through public selection notices posted as set in this clause. Contractors for associated projects may be appointed by the project without a public application process when they can prove it is advantageous and does not conflict with SPI’s public charitable status. SPI may, at its discretion, source candidates from preferred vendor lists, contractor databases, external agencies or professional networks where appropriate and necessary.
   • The applicants shall be required to provide, along anything stated in the selection notice, their contact information, including full name and address, for contact and compliance purposes. The data will be treated as set forth by SPI’s Privacy Policy.
   • The SPI Vice President will send all the selected contractors a questionnaire with questions to determine they can reasonably act independently from SPI. If the questionnaire casts sufficient doubt on the capacity of the contractor acting independently from SPI, the Vice President or their designee will reject the application.
   • If another SPI Board member disagrees with the Vice President decision to reject such application, they may request the Board to vote on it within 5 (five) days from the rejection date.
6. Interview and Selection:
   • The SPI Vice President or their designee shall conduct interviews with potential candidates to assess their suitability.
   • Selection shall be based on their professional capabilities and suitability for the specific requirements of the project and expected deliverables.
7. Written Agreement:
   • A written agreement shall be prepared based on SPI’s standard form Independent Contractor Agreement and shared with the selected contractor. The agreement which shall contain, at a minimum, the following terms:
     1. A description of the services to be performed by the contractor and any associated deliverables and applicable timelines;
     2. The name of the SPI project liaison in charge of reviewing and approving the deliverables. The liaison in charge of reviewing and approving the deliverables may not be under a conflict of interest. When the liaison is not a SPI board member, they shall voluntarily submit a Conflict of Interest statement prior to their first review and approval of the contract.
     3. A fixed end date, which shall be no greater than 2 (two) years in duration, and the manner in which it may be renewed;
     4. The agreed-upon fee amount and payment terms, which must not be shorter than NET-15 (fifteen) days from the receipt of the contractor’s invoice. The agreement shall also state that invoices sent after the deadline for invoice submission (i.e. the “book closing date”) may not be paid
     5. n obligation by the contractor to maintain confidentiality of SPI’s information and data, and assignment of intellectual property ownership rights to SPI of all deliverables to be created under the engagement;
   • The SPI Vice President or their designee shall negotiate terms of the contract including payment schedule, confidentiality agreements, and specific terms related to the project.
   • Where modifications to the standard form of Independent Contractor Agreement are proposed, or the contractor requires use of a form other than SPI’s standard form, the agreement shall be submitted to SPI’s legal counsel for review and comment prior to its execution to ensure all terms are legally compliant and protective of the organization’s interests.

Following these steps will ensure that the process of hiring an independent contractor at our company is thorough, compliant, and aligned with our strategic goals, thereby optimizing the contribution of each contractor to the organization.

Contractor Evaluation

Consistent with applicable laws regarding contractor classification, SPI shall not control the manner or means in which the contractor performs its services; however, it shall properly evaluate the outcome deliverables from contractors to ensure the quality and timeliness of their contributions align with our organizational standards and project goals. Here are the guidelines we follow:

1. Clear Expectations: At the start of the engagement, clearly outline deliverables, deadlines, and quality standards. Ensure that contractors understand their responsibilities and the criteria against which their work will be evaluated.
2. Designated Point of Contact: SPI’s Vice President or their designee shall be the designated point of contact for the contractor with respect to overall progress and deliverable timelines, and to address any adjustments to work plans, deliverables or timelines.
3. Evaluation of Deliverables: SPI’s Vice President or their designee shall be responsible for conducting a comprehensive evaluation of contractor deliverables, taking into account the scope of work under the agreement and the effectiveness of such deliverables in advancing SPI’s mission and goals. The liaison is expected to review and approve the deliverables within 5 (five) business days, after which any SPI officer may approve the deliverables tacitly. Tacit approvals will not shrink nor reduce any responsibility from the liaison.

Contractor Payment

SPI maintains standard practices for determining pay rates, invoicing, and payment timelines to ensure fairness and transparency in our dealings with independent contractors. Here's how we manage these financial aspects:

Pay Rates

1. Market Research: SPI will conduct market research or rely on compensation experts to benchmark pay rates based on industry standards, the complexity of the job, and the contractor's expertise and experience level.
2. Negotiation: Pay rates are negotiated at the beginning of the contract agreement to ensure clarity and mutual satisfaction. Rates are documented in the contract, specifying whether payment is fixed per project, hourly, or based on deliverables.

Invoicing and Payment Timelines

1. Invoicing Procedure: Contractors shall be required to submit invoices according to the terms specified in their contracts, usually monthly or upon completion of milestones. The SPI Treasurer shall notify all contractors of the deadline for invoice submission (“book closing date”) at least 30 (thirty) days before the deadline. The SPI Treasurer shall review and approve submitted invoices. In the course of such review and approval process, the SPI Treasurer shall coordinate with the liaison to ensure that such invoices accurately reflect services performed under the agreement.
2. Payment Timeline: The SPI Treasurer shall ensure that all contractor payments are processed within the period set forth in the agreement, typically 30 (thirty) days from the invoice date (but no less than 15 (fifteen) days thereafter).
3. Late Invoices: Late invoices may be denied for payment at the discretion of SPI. SPI’s Treasurer may grant exceptions or impose restrictions regarding the handling of late invoices.

Expense Reimbursements and Compensable Costs

1. Pre-Approval: Contractors shall be required to provide detailed forecasts of any likely expenses that might occur during the contract period. All expenses must be pre-approved by the SPI Vice President or their applicable designee.
2. Expense Submission: Contractors should submit all expenses with necessary receipts or documentation through the designated expense management system.
3. Reimbursement Process: Once verified, reimbursements are processed and paid out with the next scheduled invoice payment. Clear guidelines are provided regarding what expenses are reimbursable and the documentation required.

Renewal of Contractor Engagements

Every year, in the November meeting or as otherwise requested by the Board, the SPI Vice President will send to the Board a private email listing all contractors, their current rates, when their term ends and a recommendation as to whether the contract should be renewed based on the input of relevant SPI stakeholders. The email shall also state if any of the rates will be raised, and by how much.

When no Board member raises any objection within 15 (fifteen) days, the SPI Vice President is allowed to renew the contracts and provide any raise in the document. In case of objections which cannot be resolved by consensus, the Board will deliberate through a vote.

Termination of Contractor Engagements

Terminating a contractor’s services with our company is handled with professionalism and respect, adhering to the guidelines established to ensure fairness and clarity. Here are the steps involved:

1. Notice Period: As per the contractual agreement, contractors are typically required to be given a notice period, which is usually defined at the outset of the contract. The standard notice period can vary, but it is often between two weeks to one month, depending on the project's duration and nature.
2. Notification: Termination should be communicated in writing, specifying the effective date and the reasons for termination, if applicable. This helps maintain transparency and documentation for both parties.
3. Completion of Pending Work: During the notice period, contractors are expected to complete any pending work unless instructed otherwise. This may include handing over documents, transferring knowledge, or finalizing segments of the project.
4. Final Payment: After the termination, a final invoice should be submitted by the contractor for any work completed during the notice period. SPI is responsible for processing this final payment within the agreed timeframe, typically within 30 (thirty) days of receipt, to fulfill financial obligations.
5. Exit Interview: Although not mandatory, conducting an exit interview can provide insights into improving processes and relationships with future contractors.

Conflicts of Interest

All Board members and officers shall abide by SPI’s Conflict of Interest policies as in effect from time to time with respect to contractor engagements.

The liaison(s) tasked with hiring contractors, reviewing and approving contractor deliverables, and contract renewal or termination decisions may not be under a conflict of interest. When the liaison is not an SPI board member, they shall voluntarily submit a Conflict of Interest statement prior to their first review and approval of the contract.

Under no circumstances may a contractor working in SPI Treasury review, approve or pay their own contract. All such contracts shall state that in such case, the Board may terminate the contract immediately for cause (without payment of any sort of penalty).

Recordkeeping

The Secretary shall implement measures to maintain appropriate records of all contractor questionnaires, contracts and notices. The Secretary shall remain responsible for the archive completeness even where they delegate recordkeeping obligations to others.

All contractor engagements entered into, renewed or adjusted after this policy effective date will adhere to the terms of this policy. SPI and its Board reserve discretion to amend this policy from time to time as necessary and appropriate.