Confusion over Co-employment? Mitigating the Risk Made Easy
The contingent labor workforce is growing worldwide and companies across the globe are using payrolling providers to serve as the Employer of Record for their contingent labor workers. Part of the payrolling provider solution is mitigating any risk of co-employment. ICON not only helps you with your contingent labor needs, but also explains what co-employment risks exist in the payrolling industry and how we can mitigate those risks.
First, ICON understands the risks inherent in the payrolling industry and we manage those risks, not avoid them. In the payrolling relationship, the client controls the daily activity of the contingent labor workers, while the payrolling provider serves as the Employer of Record. However, there are exceptions to the inherent risk in payrolling relationships. We use those exceptions and provide our clients with advice on how to structure their contingent labor program in a manner to gain protection under those exceptions.
For example, benefits are an extremely important subject. First, we advise our clients to be clear in their benefit plans’ eligibility provisions. By this we mean, we advise our clients to ensure that if benefits are to be offered by the payrolling provider, as they should, they need to clearly exclude their contingent labor workforce from eligibility in their plans. Of course, you also have the Affordable Care Act and its co-employment definitions. The “pay or play” rules add another layer of co-employment risk. By the payrolling provider offering ACA compliant coverage, the client can take credit for that offer of coverage provided the client pays the payrolling provider more for the worker who accepts the offer of coverage.
Ultimately, there are risks in any type of employment structure, whether through a permanent workforce or with a contingent labor force through a payrolling provider. ICON has more than 20 years of expertise in the payrolling arena and can: (1) help you with your contingent labor needs, (2) advise you on how best to limit the risk of co-employment throughout our partnership, and (3) actually take the necessary action to mitigate the risk.
The contingent labor workforce is a very important working population and co-employment should not scare business owners away from a payrolling solution. Be sure that you use a payrolling provider, such as ICON, who can help you, educate you, and work with you to make a successful program.
*Nothing in this blog article is to be construed as legal advice.*
Posted by Karen House