Please consult your authorities. It is generally not legal to have a contractor’s employees on your payroll, as this could create an employer-employee relationship. To manage this properly and maintain legal compliance and avoid unnecessary liabilities you should consider having:
- Contract Agreement: Ensure that the contractor is responsible for hiring and paying their employees, with this clearly stated in the contract.
- Payment Process: Pay the contractor directly, based on invoices for services rendered, without paying their workers, i.e. do not put them on your payroll or expense list at all (yes I will revise my earlier post accordingly)
- Liability Safeguards: Include provisions for withholding payments until the contractor meets obligations, and possibly if available require liability insurance to cover risks.