Risk Mitigation

The MBO Partners risk mitigation approach is a proven and reliable method for dramatically improving your IC-related risk profile while keeping your valuable IC assets happy and productive.

The MBO solution tackles the primary risk factors in the following ways.

Reclassification

Most contractors working independently (as single-person corporations or otherwise) are not in compliance with these guidelines. For these workers, MBO Partners offers ICs an attractive and safe W-2 employment solution. By becoming W-2 employees, contractors become compliant with the IRS and state taxation authorities, as all appropriate taxes are withheld automatically.

Those ICs whom MBO Partners finds to be compliant may continue to work as independent entities and are instructed to provide supporting documentation that MBO includes as part of a "Contractor Compliance File." MBO keeps these files current by re-assessing contractors with each new assignment. By continually ensuring the reliability of its evaluations, MBO Partners better positions clients to survive potential audit scrutiny.

Co-Employment

The MBO Partners compliance approach also significantly mitigates the risk of incurring co-employment lawsuits. The MBO W-2 employment alternative, MBO Exec, offers excellent group benefits while preserving ICs' career freedom. (MBO gives all ICs their own online Business Center, MyBizOffice, which is fundamentally their own autonomous business division within MBO Partners.) Because the MBO W-2 employment alternative is so attractive to even the most unwavering ICs, with benefits as good as or better than blue chip employee programs, contractors have neither the inclination to initiate—nor the foundation to win—a co-employment lawsuit.

The MBO Partners approach also further reduces co-employment risk by enabling assignments to be performed on a "deliverable" basis (eliminating the risk-inducing confusion associated with hourly compensation rates), having qualified independent contractors document their declining of employment, and reviewing your business's defined benefit plans and stock option programs to clarify which workers are excluded from the plan.

Business Liability

Because many independent contractors do not carry any (or sufficient) business insurances—such as Workers Compensation, General Liability, Crime Bond, and Errors & Omissions—their clients risk significant damages should the contractor become injured on the job or cause problems due to poor work.

MBO Partners minimizes this risk through its compliance process. The MBO compliance assessment delves into ICs' insurance status and requires that they supply copies of all insurance-related paperwork. If ICs are unable or unwilling to provide this documentation, MBO Partners deems them non-compliant and directs them to work as W-2 employees rather than as ICs.