Worker classification is an important consideration for companies that engage with independent contractors. Non-compliance can have a significant financial and reputational impact, as evidenced by the hundreds of millions of dollars paid out each year in settlements resulting from misclassifications.
During a webinar installment of our Expert Spotlight Series, special guest Robert Guidotti, Principal at Jackson Lewis P.C., weighed in on an important discussion around the state of worker classification compliance. The following are some key takeaways from our chat with him.
Regulators, tax authorities, and other agencies that are actively looking for misclassified workers don’t focus on a particular area of industry. Worker misclassification has affected a variety of types of employers, from hairdressers to home health aides to IT professionals. The risk of non-compliance is real for orgs of all sizes, though businesses that rely heavily on independent contractors are obviously vulnerable if classification is mishandled.
While some companies may go on for years without any issues, it only takes a single event, such as a worker seeking benefits they’re not eligible for as an independent contractor, to trigger regulatory action and possibly reveal broader misclassification issues. One instance of misclassification can have a domino effect in other areas of a company, including investigations into other employment practices like wage compliance and record keeping.
Obviously, not all independent contractors are misclassified. Legitimate independent contractors play integral roles in business, but it’s important to carefully analyze those roles to avoid unwanted outcomes. Businesses should approach relationships with independent contractors with improvement in mind, focusing on compliance and ensuring that contractors are not treated like W2 employees. It’s crucial to set the right tone from the start to avoid problems, and having an experienced partner in your corner can help make that happen.
HireArt is standing by to help your organization get the most out of its contract workforce experience while providing important indemnification for compliance-related issues.
To learn more about how HireArt can help with compliance or other areas of contract workforce management, check out the HireArt platform today.
Click here to watch the full recording of “Navigating the Complexity of Worker Classification”
