Steps to Avoiding Co-employement Risk with Independent Contractors
Contractors who work at organizations for extended lengths of time can seemingly become the fabric of the organization. When someone walks your company's halls it is impossible to tell who is a full-time employee and who is a contractor. There in lies the problem. 
Many organizations lose sight of the proper Contractor-Employer relationship and put themselves at risk as it pertains to co-employment. Many of you are familiar with the Microsoft Case that exposed the company to millions of dollars in fees and fines due to what was perceived by the courts as a co-employment situation.
Here just a few rules to follow to help in mitigating co-employment risks.
- Set tenure thresholds that limit the time in which an individual can serve in one position as a contractor within your company.
- Do not invite the contractor to corporate events. i.e. Holiday Parties, Corporate Functions, etc. They are not an employee of the firm and therefore should not participate
- Do not formally review the contractor's work. This is a tough one, but try and run all directional input and statements through the contractor's company representative or in writing to the corporation they are provided to you through.
Try and remember the courts will review these relationships under a comparison filter. If it sounds like; looks like; feels like; a full-time employee/employer relationship, then it is.
Do you have any items your company conducts to mitigate co-employment risk? Please jump on the PSC Blog Train and share with us what you know.
These are just a few of the items you can do to protect your firm. If you want to learn more about the potential Risk/Rewards of Independent Contractors, please take our Free Risk/Reward assessment.