Ensuring Worker Classification Compliance Amid Regulatory Changes

In today's ever-changing business landscape, it's crucial for organizations to stay up to date with labor laws and regulations to avoid violations. We continue to see case after case of organizations unknowingly misclassifying workers with huge ramifications including litigation and settlement costs. We don’t want this to be you!?

In this article, we provide guidance on compliance when hiring freelance and contract professionals to help keep you protected.?

Understanding Worker Classification?

Worker classification is the process of categorizing workers based on their level of involvement in a company. There are seven common worker classifications: contract, independent worker, part-time, full-time, temporary, on-call, and volunteer. Each classification has different implications for wages, benefits, and protections. Proper classification is crucial as it determines how workers are compensated and protected under labor laws.?

Because labor laws continue to change and can vary from state to state, it has become increasingly difficult for organizations to properly classify workers. Misclassification is unfortunately increasing, infringing on workers’ rights and hurting organizations both financially and legally.??

Stay informed on the latest labor law changes with our Compliance Resource page.?

How Labor Law Changes Impact Your Business?

The labor law changes have significant implications for businesses that rely on freelancers and contract workers. Here are some key impacts to consider:??

Increased Complexity and Costs?

Ensuring worker classification accuracy now requires more time, labor, and budget. Misclassification can result in fines and litigation, posing a significant financial risk for organizations. ?

Scrutiny on Hiring Practices?

The current economic landscape, characterized by increased layoffs, puts more scrutiny on businesses' hiring practices. It is an important time to leverage agile talent for companies that are downsizing or need additional short-term support for their teams. But you must be careful to hire independent talent correctly. That’s where we come in!?

Soundings is committed to helping keep your organization safe from misclassification and streamlining compliance needs for you, so you can focus on what’s most important. You can think of us as your ‘compliance guardians’.?

Read on for more on how we can help you.??

Stay Protected?

Do you currently have contract or freelance workers, or are you considering incorporating them into your team? If so, don't be among the 30% of employers who misclassify them.?

Consider these potential pitfalls that put organizations in noncompliance when they classify workers as freelancers/contractors instead of employees, as outlined by the IRS:?

• Hiring a freelancer that does the same work as an employee or that is a core business function for your company.?
• Controlling freelancer behavior or financial/business components like when and how freelancers work or how payment is processed.??
• Hiring a freelancer without proof that their independent business legitimately exists at the time of hire (e.g.: talent must have appropriate independent business licensure).?

If your organization is doing some of the above actions, or you’re unsure if you are in danger of noncompliance, it is essential that you seek professional assistance. Find a partner, like Soundings, who can ensure worker classification compliance and handle payroll and benefits administration based on the classification.?

Compliance Resources?

Navigating the complexities of worker classification can be daunting, but it is crucial for organizations to remain proactive and compliant. Here are some resources and steps you can take to ensure compliance and prepare your organization to hire agile talent:?

• Take the ABC Test: Use the ABC Test to determine if a specific individual or role qualifies as an independent contractor.?
• Seek Professional Assistance: Find a partner you trust that specializes in agile staffing solutions and can provide your organization with forward-thinking protection.??
• Stay up to date with the latest labor law changes and compliance resources with our Compliance Resource Page.?

Why Soundings?

Soundings has been monitoring changes to worker classification compliance and we have developed a solution for hiring independent talent that ensures compliance as the rules continue to change. In fact, we are the only business in the event industry that is making these efforts to keep companies compliant. And we handle the process from A to Z.??

By understanding the implications of worker classification changes and leveraging available resources, organizations can reap the benefits of working with freelancers and independent contractors while remaining compliant and competitive in today's evolving business landscape.?

Do you want to mitigate misclassification worries once and for all? Contact us to get started.?

About Soundings Connect:?

Soundings Connect is a leading provider of agile staffing solutions, specializing in connecting organizations with independent talent. We prioritize compliance and ensure access to the talent you need in a compliant and cost-effective manner. Contact us today to learn more about our services and how we can help your organization thrive.?

Disclaimer:?

The information provided in this article is for general informational purposes only and does not constitute legal or professional advice. Consult with us for specific guidance on worker classification and compliance with labor laws regarding your organization.?