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Independent Contractor Compliance
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Independent Contract Compliance

W2 Payrolling Services

Independent Contractor Compliance

A company has many choices in terms of how it engages with its workforce. From a traditional salaried or hourly worker to an independent contractor that is in business for him/her-self and is paid based on a project, deliverables, or hourly basis. As a result, companies have varying responsibilities and restrictions in terms of classifying, onboarding, managing, paying, and offboarding its workers.

 

An independent contractor is a self-employed individual performing services for a company under contract. Unlike an employee, an independent contractor is supposed to perform the work with limited oversight or control over the performance and delivery of the work. Courts and regulatory agencies use different compliance tests to determine whether an independent contractor meets the minimum criteria to be classified as a bona fide independent contractor, or if the worker must be ‘reclassified’ as an employee. ‘Reclassified’ means that the company originally classified the worker as an independent contractor, but the worker did not pass a compliance test and must be reclassified as an employee for purposes of that test. For example, the U.S. Department of Labor uses a different test to determine whether a worker is a bona fide independent contractor for purposes of the Fair Labor Standards Act (e.g., the FLSA governs whether a worker is eligible for overtime premium pay; a bona fide independent contractor is not eligible for overtime pay while an employee is eligible) than a state may use to determine if a worker is eligible for unemployment compensation after his/her work ends (a bona fide independent contractor is not eligible for unemployment compensation). If a company is compelled to reclassify a worker, the liability can be significant, ranging from back pay and penalties to attorneys’ fees and mandatory compliance training. 

 

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ICON mitigates and/or resolves the compliance challenges and concerns relating to the engagement and management of independent contractors, depending on the specific services sought by its customer. For instance, ICON can step in and deploy its technology to collect and analyze compliance documents, vet each contractor for compliance with applicable law, and/or provide full end-to-end compliance from onboarding through offboarding. Further, ICON’s technology substantially decreases on-boarding times and increases worker readiness, both key factors to a successful program. 

 

Following are some of the key features of ICON’s compliance technology:

 

  • Proprietary technology, fully owned and controllable by ICON.

  • The compliance tool is built on the law, from statutes to case law decisions to regulatory guidance.

  • ICON has taken painstaking care to ensure that the content in the compliance tool is written in common English for non-lawyers. No legalize. 

  • The tool tests for compliance with laws on the Federal, state and, if applicable, local level.

  • The tool is customizable to each of our clients' individual compliance needs.

  • Designed to work with a broad range of customers, from mid-sized to large enterprises with multiple divisions, brands, and/or affiliates.
  • Full remediation process (remediation means a worker that is non-compliant is brought into compliance through a series of corrective action and implementation of best practices).

  • Elimination of testing bias.

  • Elimination and/or mitigation of liability exposure.

ICON’s Compliance Team – comprised of long-standing industry professionals – is second to none. ICON’s team provides compliance training for its customer’s managers, provides audit defense, handles escalated matters, handles all 1099 and W9 compliance, and performs all other necessary tasks to create a positive and compliant experience for each independent contractor, his/her manager, and ICON’s customer. For gig, on demand, job boards, and other technology platforms that source, supply, and/or market independent contractors to consumers or other businesses, please contact us to discuss our customized compliance solutions.

  

 

ICON is the expert in independent contractor compliance, and its track record is impeccable.  ICON knows the law, and it knows how to manage compliance and independent contractors.

 

Have questions and would like to discuss your unique needs? Click here to reach out to an ICON representative now and get started.

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Key Resources

Using Independent Contractors in California After AB2257

Assembly Bill 2257 (“AB 2257”) was signed into law on September 4, 2020, a mere 247 days after AB5 went into effect. AB 2257 repealed and replaced AB5, Read ICON's blog for more information on what this new bill will mean to hiring entites and independent contractors.

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The Agile Workplace - Gig workers

The talent landscape has become increasingly more substantial over the past few years. Workers are in perpetual search of meaningful engagements that reflect their core values. ICON is positioned to help companies just like yours with onboarding, candidate communication, and compliance automation in this new “gig economy.”

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Handling Independent Contractors....the ABC's

California Labor Laws grow more stringent. This article highlights the latest changes.

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