4 Top Action Steps to Resolve Independent Contractor Compliance Issues

(DGIwire) – As more companies of all sizes see the value of independent contractors (ICs), businesses need to understand what today’s most forward-looking companies are doing to reduce the risk of employee misclassification. The following four best practices can help mitigate the risks associated with engaging independent talent.

  • Establish a consistent, centralized process to evaluate and contract ICs. A good place to start is to get a general understanding of the organization’s current IC classification and engagement procedures, notes the Association of Corporate Counsel (ACC). What is the current process? Who is in charge of evaluating ICs? Is the process consistent for all engaged ICs? It’s important to learn how well company policy and current government guidelines are being followed.
  • Review vendor procurement practices to properly assess potential ICs. Among other requirements, ICs are typically required to maintain certain levels of business insurances and have clearly defined milestones or deliverables than that of other, larger vendors providing services. It is important to create standardized requirements for all contracted ICs and to set some standard minimum levels of business insurance coverage, the ACC suggests.
  • Review current IC contract templates. It is easy for managers to get into the rut of simply digging up a standard IC contract template and sending it over to any new IC who comes along. According to the ACC, an organization should carefully review its IC contracts to ensure the terms and obligations do not create an employer-employee relationship between the parties. Contracts should specify the relationship of the parties and the services being performed by the IC.
  • Determine if an enterprise IC compliance program is needed. Without an external IC compliance specialist providing guidance, says the ACC, there is a chance a company may be currently engaging misclassified ICs. If internal staff are unable to completely fulfill the duties of ensuring proper IC classification, it can engage the services of IC engagement experts dedicated to ensuring IC compliance.

“Knowing what steps to take to minimize the risk of legal entanglements associated with ICs is a wise measure for any organization,” says Rebecca Cenni, founder and CEO of Atrium Staffing. “Having these strategies mapped out prior to engaging any external talent is a must in today’s business world.”

Atrium is focused on providing contingent workforce solutions for mid-size and Fortune 500 companies in nearly every industry. Atrium’s expertise includes regional Temporary and Direct Hire Staffing, national Payrolling Services, national Independent Contractor Engagement and Intern Program Design. The company has extensive experience matching the right candidates for a range of positions within a variety of industries.

“The complexities of proper IC compliance can be daunting, so engaging the services of experts with proven experience in doing so could be a valuable road to pursue,” Cenni adds.