10 Strategies to Reduce Contractor Compliance Risk

By MBO Partners | ,

Updated Monday, August 3, 2020

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Understanding how to properly engage and manage independent contractors is critical for the modern business. If you suspect that your company’s independent contractor engagement practices heighten your risk profile, it’s important to make sure you have a good understanding of what today’s most forward-looking enterprises are doing to reduce their compliance risk.

10 Compliance Strategies to Reduce Worker Misclassification Risk

1. Revise onboarding practices

Establish a centralized process for onboarding so the process is the same for all independent contractors across your organization. Creating a smooth, hassle free process allows results in fewer mistakes and prevents rogue engagement.

2. Put the right policies in place

Create policies that ensure compliant engagement, including insurance coverages and billing instructions.

3. Revise procurement practices

Create practices for engaging small business vendors that include standards such as minimum levels of business insurance coverage.

4. Review contingent worker contracts

Use a written contract when engaging independent contractors that creates understanding in terms of expectations and limitations of your contractor-client relationship.

5. Learn the difference between employees and independent contractors

Review benefit plan documents to ensure independent talent you engage are truly being treated as independent contractors and not employees.

6. Conduct an internal audit

Conduct an audit to assess your risk and evaluate your current program.

7. Analyze your existing compliance measures

Evaluate your existing independent contractor engagement program to determine if it is consistent and effective.

8. Know your risk profile

Sample a group of independent contractors and determine where issues exist.

9. Secure executive support

Create a plan for obtaining support at the highest level.

10. Plan for change management

Educate internal staff so they can easily adopt new policies into their workflow.

Learn more about the 10 best practices for mitigating the risks associated with engaging independent talent.