4 Ways a Big 4 Consulting Firm Improved Contractor Compliance (Case Study)
In contrast to a typical W-2 employee, an independent contractor does not receive health care, unemployment insurance, or overtime benefits from their clients.
Workers must meet a very specific set of criteria in order to be legally classified as an independent contractor.
The best way to mitigate risk is to create a specific program for finding, engaging, and managing independent talent.
Vertical: Professional Services | Type: Misclassification and Compliance
When enterprises engage independent contractor talent, they must take steps to comply with relevant laws, policies, and regulations in order to operate legally. Compliance means many things—from preventing harassment and discrimination, to safeguarding sensitive data and building a safe workplace. And, when it comes to independent contractors, there are specific laws and regulations organizations need to follow.
Independent contractors operate as their own business entity. In contrast to a typical W-2 employee, an independent contractor does not receive health care, unemployment insurance, or overtime benefits from their clients. As such, organizations can gain many befits from engaging this type of talent including increased flexibility and access to in-demand skills, as well as cost savings.
But workers must meet a very specific set of criteria in order to be legally classified as an independent contractor. If a company fails to properly classify their workers, it can result in costly legal consequences and negative publicity.
How Organizations Ensure Worker Classification Compliance
So, how do organizations ensure they are properly classifying their workers? There are many ways to reduce risk. To start, it is helpful to become familiar with guidance from federal agencies—the Department of Labor (DOL) and the Internal Revenue Service (IRS)—as well as the state your organization resides in. It is also important to use written contracts for all independent contractor engagements and to ensure practices kept up-to-date with changing laws and regulations.
But the best way to mitigate risk is to create a specific program for finding, engaging, and managing independent talent. Programs like this take into account a particular industry, and what laws apply for proper classification of workers. A program can help provide peace of mind, provide legal protection, and make a company an attractive place for independent contractors to work.
4 Ways a Big 4 Consulting Firm Improved Contractor Compliance
A Big 4 consulting firm was looking to improve their approach to independent contractor compliance. The firm was managing compliance internally, but the process was clunky and inadequate. They were aware that continuing down this path would ultimately cause issues, so they decided to partner with MBO to find a way to engage their independent talent in a single, compliant model.
Partnering with MBO, the consulting firm did four things to improve contractor compliance:
- Developed a comprehensive compliance program, decreasing enrollment time, increasing cost savings, and boosting enrollment manager satisfaction
- Created a better overall experience for independent talent
- Worked closely with teams of lawyers to ensure proper development of an airtight compliance solution
- Established a consistent system of record for all contingent labor engaged
View the case study to learn more about how the consulting firm decreased enrollment time, increased cost savings, and boosted independent contractor and enrollment manager satisfaction.
You can also contact our team of experts today, or view our case study library to see more success stories.
The information provided in the MBO Blog does not constitute legal, tax or financial advice. It does not take into account your particular circumstances, objectives, legal and financial situation or needs. Before acting on any information in the MBO Blog you should consider the appropriateness of the information for your situation in consultation with a professional advisor of your choosing.
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