Contractors and employees on one engineering team work best when you share information, standards, code review and incident learning, and keep separate the control over hours, method, line management and formal HR. The advice is for engineering leaders with engineers in the EU or UK, engaged directly or through a vendor. More on running mixed teams is in our engineering management guides for CTOs and VPs of Engineering.
Anything we mark as judgment is ours, not a rule from a regulator. This isn't legal advice. Whether a particular person is self-employed is decided on the facts by counsel in the country involved, and by the tax authority if it ever asks.
Why integrating contractors is also how they get reclassified
Authorities tend to look at how the work happens, not at what the contract calls it.
Germany: section 7(1) of the Social Code IV (SGB IV) says the indicators of employment are working under instructions and being integrated into the work organisation of the person giving them. Our guide to how Germany tests false self-employment covers the reach.
Netherlands: the KVK's Wet DBA page points to self-employment when you set your own working hours, decide how you do the work and don't lead the client's employees. It flags doing work the client's own employees do as a pointer the other way. The Wet DBA risk for Dutch freelance developers page has the rest.
United Kingdom: HMRC's Employment Status Manual (ESM0518) says the right of control matters, whether or not it's exercised. Its page on integration (ESM0545) is the hinge for this article. It says being part and parcel of the organisation is only a factor, and that "a distinction has to be made between being part of a team and being an integral part of an organisation". ESM0545 quotes a tribunal decision (Future Online v Foulds) in which the worker had a manager he was accountable to, was expected to be available to advise and assist other team members, and took part in work allocation discussions.
In our judgment, joining a retro is team membership. Taking assignments from a manager, covering for colleagues on request and being slotted into the org chart is the other thing, and most practices sit on one side of that line or the other.
What to share with contractors
Share anything that helps someone ship the right thing. In our judgment this is the low-risk category, because it's information and standards, not instructions about how a person works.
KORE1, a US staffing firm, says contractors belong in retros and incident reviews for work they touched, and should author architecture decision records (ADRs). It also says contractor-only channels and excluding contractors from retros create a two-tier culture. We agree with the direction. A contractor who never hears why the payments service is shaped as it is will either reinvent it or break it.
In practice that means roadmap context for their piece of work, the same coding and review standards as everyone else, the same incident channel and the written post-mortem. If you've set up onboarding for a contract developer in 14 days, the access list and the buddy from that plan are the mechanics.
Note the US framing. KORE1 says its contractors are W-2 employees of KORE1, a US model, and sends legal questions to counsel, so its advice doesn't work through EU or UK status tests. For a directly engaged freelancer in Europe, the same advice is fine for information and needs more care where it touches control.
Who owns what: a decision-rights table
KORE1's rule is to assign decisions by the work, not the badge. It says banning contractors from approving pull requests is usually a status rule dressed up as a control, and it carves out SOX-style segregation-of-duties controls. It also says one-way-door decisions should go to an owner whose tenure outlasts the consequences. The last column is our judgment.
| Decision | Owner | Can a contractor own it? | Status note (our judgment) |
|---|---|---|---|
| Implementation approach inside a ticket | The engineer doing it | Yes | Choosing the method is a self-employment pointer, so leave it with them |
| Architecture one-way doors | A permanent engineer signs | Author it, don't sign it | KORE1's tenure rule would let a contractor own it where the engagement outlasts the consequences |
| Merging and approving pull requests | Whoever knows the code | Yes, where they know the code | Review rights follow knowledge; we see no status reason to ban it, but counsel decides |
| Reviewing employees' code | Whoever knows the code | Yes | Reviewing quality is not directing how someone works |
| Access grants and revocation | An employee admin | No | Security control, not a status question; keep it in-house |
| On-call and pager | Depends on the contract | Only if written into the scope | Standing availability looks like integration; check first |
| Definition of done | The team, set in the ticket | Contribute | Agreed acceptance criteria are deliverable-based, which helps the contractor's position |
| Deploying to production | Per your release process | Yes, if the process allows it | Same permissions as an employee in the same role is a security rule, not control |
The grey area is on-call. In our judgment, a rota that treats a freelancer exactly like a salaried engineer looks like integration. ESM0545's tribunal example of being "available to advise and assist other members of the team" is the nearest published pointer, and it isn't about on-call. If you need after-hours cover, price it as a separate scope.
Practice by practice: share, share with care, keep separate
Every call below is our judgment. The sources named are the tests each habit touches, not rulings on it.
| Practice | Call | Why, in one line |
|---|---|---|
| Same standup and retro | Share | UK: this sits on ESM0545's team side. In Germany, our guide treats stand-ups as one of several integration facts, so it's the combination that counts |
| Sprint tickets written as deliverables with acceptance criteria | Share | Keeps the review on the output, not on how it was produced |
| Same chat channels, demos and changelog credit | Share | Information and recognition, no control involved |
| Fixed hours or mandatory online windows | Share with care | HMRC's control test and KVK's own-hours question both apply. Agree overlap, don't impose a schedule |
| Step-by-step method instructions or monitoring beyond results | Keep separate | KVK lists deciding how you do the work as a self-employment pointer; HMRC's right of control (ESM0518) cuts the same way |
| Company email, an org-chart slot, ranking against employees | Keep separate | Each reads as part of the organisation, not a supplier to it |
| Contractor line-managing employees | Keep separate | KVK's test is that you don't lead the client's employees |
| Doing exactly the work employees do, for a year (illustrative, not a legal threshold), for one client | Share with care | KVK's question about work employees also do; the German page covers the reach |
| Benefits, equity, bonus and HR processes | Keep separate | In our judgment these belong to employment; see the fairness section below |
§7 SGB IV gives indicators and KVK says the answer depends on several characteristics, so no single row decides anything. A contractor who attends the retro but sets their own hours, uses their own equipment and works on a scoped deliverable is in a different place from one who attends the retro, works 9 to 5 under your engineering manager and covers the pager.
The working rule is the one in our guide to what you can direct when managing nearshore developers. If you'd give an employee the same instruction, schedule or monitoring, check before giving it to a contractor.
How to run performance without a review cycle
Do contractors get performance reviews? Not in the HR sense, if they're direct freelancers. In our judgment the substitute works better anyway: frequent feedback on the work product against agreed deliverables and acceptance criteria. "This PR missed the retry case again" is feedback on output. "Your attitude in standups" is a performance review, and it's the version that reads like employment.
The extend, renew or end decision is a commercial decision on the contract. Write the criteria into the statement of work, review them at the contract's checkpoints and say plainly when you're not extending. Formal reviews, improvement plans, bonuses and rankings stay out for direct contractors.
Vendor engagements are different. KORE1 advises routing formal reviews through the staffing firm that employs the engineer. That's one US firm's model, not a general rule. If an engineer sent through a vendor isn't performing, the route runs through the vendor, not through your own review process.
Keeping the team fair without making contractors employees
Two-tier teams happen quietly. The contractor isn't in the channel where the decision was made, doesn't appear in the demo, and finds out about the outage from a customer.
Fix the parts that cost nothing and carry no status weight. Put contractors in the same channels. Name them in demos and changelogs. Give them access to the same knowledge base and design documents. KORE1's view is that benefits, equity and HR processes should stay separate. In our judgment that's right: extending them to a freelancer is how a fair-minded manager accidentally builds the evidence file for a reclassification.
Say early what the arrangement is: a scoped piece of work, a rate, an end date. That clarity is fairer than a pretence of permanence.
What this means for your engagement model
If you want contractors to behave as a permanent part of the team (on-call, managing others, fixed hours, long tenure on the same work), you're no longer choosing a management style. You're choosing an engagement model. Our judgment is that the decision has three honest outcomes. Keep a scoped-deliverable contractor model and accept that the engineer stays slightly outside the team's control surface. Move the person onto employment. Or engage the person through an employer of record.
The mistake is drifting into the second outcome while the paperwork says the first. Check your contractors against the practice table above, and for any who sit mostly in "keep separate", decide deliberately with counsel. The comparison of EOR vs contractor for developers in Europe is the next step, because it sets out what changes in control, cost and risk when you pick each.
FAQ
Do contractors get performance reviews?
Not formal HR ones, if they're direct freelancers. Give feedback on the work product against agreed deliverables and acceptance criteria, and treat renewal as a commercial decision on the contract. Where a vendor employs the engineer, the formal review is usually the vendor's job under the contract. Check your agreement.
Can an independent contractor manage employees?
We'd avoid it. The KVK's Wet DBA guidance treats not leading the client's employees as a pointer to genuine self-employment. HMRC's manual quotes a tribunal case in which accountability to a manager pointed toward integration. The two are related, not the same test. Having a contractor lead a technical decision is different from having them manage people. Check specifics with counsel.
Can contractors approve pull requests from employees?
In our judgment, yes, where they know the code. KORE1 argues review rights should follow knowledge of the code, not the badge. We found no authority tying review rights to status, so treat that as judgment and keep branch protections, access and security rules the same as for an employee in the same role.
Should contractors join retros and incident reviews?
Yes. Retros and incident reviews are information sharing, and excluding contractors makes them worse at the work. In our judgment, attending a retro sits on the team side of HMRC's distinction, and the risk comes from hours, method and management, not meetings.
Can I treat contractors like employees?
Share information, not control. Give them the same context, standards and review as the team. Don't give them the same instructions about when and how to work, and keep benefits and HR processes separate. If you'd give an employee the instruction, check before giving it to a contractor.
Sources
- Federal Ministry of Justice: section 7 SGB IV, Beschäftigung
- HMRC: Employment Status Manual ESM0518, control
- HMRC: Employment Status Manual ESM0545, part and parcel of the organisation
- KVK: Wet DBA, voorkom schijnzelfstandigheid
- KORE1: Integrating contract engineers without a two-tier culture
- KORE1: Reviewing contractor code