Are Employer of Record Services Part of Your IC Management Program?
Effective IC Management Is Essential In Today's 'High Scrutiny' Environment, Is Your Corporate Program a House of Cards?
In our recently released whitepaper "Independent Contractors, History and Perspective" we discuss the expansion of the independent contractor workforce and the vital contributions they are making to business today. The specialized services they provide offer businesses the opportunity to access the required resources as they apply to a specific project or identified need that has an endpoint and where your company doesn't recognize a longer term need. Many companies see this as a sort of panacea that lifts the burden off them as far as the commitments that come with hiring an employee including not only the various tax implications but also ensuring that there is a constant work stream for the employee.
The benefits corporations derive from the independent contractors they engage are many, but careful IC management is needed both to ensure your company continues to be able to access these assets, but also to minimize your exposure to the risk of government fines and penalties that come with the heightened scrutiny of this workforce by tax departments. All levels of government involved in income related taxes have made it abundantly clear they are investigating this growth area to ensure full compliance and proper classification both to protect the workforce and maximize their government revenues. How is your independent contractor management program responding to this environment and are you sure your company's interests are protected?
A very large number of companies independent contractor management programs have been 'cobbled together' without the deep understanding of the complexities involved and the significant risk of government imposed fines and penalties...a 'house of cards' program that will quickly topple under investigation. Further, what we see is that this sort of approach increases administrative costs due to a lack of expertise. If the tax authority discovers that your company has mismanaged your IC resources, whether it's intentional or not, your company can find itself in a very uncomfortable and costly situation. We are seeing more examples the consequences of poorly managed IC's almost on a daily basis now in this new era of increased government scrutiny.
How An Employer of Record Service Contributes to Your Corporate IC Management Program
IC Management Service companies offer their clients protection by delivering a comprehensive set of services that effectively manage the client's IC resources, one of them being EOR or Employer of Record services. This service:
- Mitigates potential co-employment risk;
- Consolidates invoicing and removes administrative invoice processing costs
- Centralizes administration ensuring consistent processing practices and legal compliance;
- Monitors insurances for IC's so that they are current and accurate;
- Protect your corporate intellectual property and business intelligence by not letting your IC resources become part of a staffing company's inventory
It's vitally important to the long term health and financial stability of your company that your IC resources are effectively managed. If you think there's even a remote possibility that your current practices are the dreaded 'house of cards' scenario, we strongly encourage you to seek out counsel on how your company should proceed and build a 'bricks and mortar' program that will withstand even the closest scrutiny. The risk is too high and the cost of correction is too low (infact many companies end up with savings on administrative costs!) not to follow a prudent path. Your workforce is your most valuable corporate asset, begin now to ensure it's not in fact a liability!
How can we help? First let's discuss your current situation and evaluate options.