It is possible to employ your retirees as independent contractors. To do so, it is important that they provide you with information that guarantees that they should not be considered a W-2 employee, and that this compliance is maintained regularly. If they are consulting, they should have more than one client, they should not use your company’s supplies and computer equipment and they cannot receive benefits through the company. If you choose to hire a retiree as an independent contractor, it is important that both the company and the retiree understand specifically why the retiree has been hired as an independent consultant. If the retiree’s situation changes in the future, he or she should let the company know so that you can reexamine the previous agreement. Maintaining this kind of contractor compliance may become burdensome and administratively expensive if you have many retirees to engage the services of, especially if you have other categories of independent contractors and consultants performing services for your firm. In addition, simply maintaining the contracts and payments to contractors can be tedious. Consider outsourcing these processes to a competent third party firm. Many employer of record companies may offer a full suite of 1099 contractor compliance management and contractor payrolling and consolidation services that can save medium to large sized companies a great deal of money.

Experienced retirees are the backbone of many companies. It could be a mistake to let these talented individuals walk away. Many retirees will hang out at the house for a few months and then be ready to return to action. By creating a consultant friendly company that offers flexibility and competitive rates for your consultants, a company can attract many of the retiring workers that will return to the job market. When a valuable member of your own team retires, let them know that the door is open and that you will work with them to develop a business relationship that works for them if they are looking to return as an independent consultant in the future.

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