Issue link: http://www.e-digitaleditions.com/i/316485
[ 27 ] MAY 2014 | www.hrotoday.com 5. Engage independent contractors for non-core work. In the best case, an independent contractor should have special expertise that the business does not internally possess. Workers who are hired to perform services that are part of the usual course of business for the company are likely to be considered employees. Some states, for example Massachusetts, have adopted what is known as the "ABC test" for determining if a worker is for an independent contractor, which includes reviewing whether the service is performed outside the usual course of the business of the employer. The risk of misclassification rises significantly if a business has employees who perform similar services to those performed by the independent contractor. The best practice to follow: An independent contractor fills a unique non-core need for a specific length of time. 6. Ensure proper vetting and engagement management to protect against reclassification and other risks. Whenever a worker is classified as an independent contractor, the business must be able to defend the classification. Be sure to collect documentation to support the classification. Along with a contract and statement of work, an organization should collect documentation to substantiate the business-to-business relationship and confirm the worker is eligible to work in the United States. The project managers making the determinations should be proficient in both federal and state agency classification criteria, as it can change frequently. Businesses engaging with independent contractors should require independent contractors to carry workers' compensation insurance and sufficient liability insurance that names the business as an additional insured. Organizations should also conduct regular audits to ensure these policies stay in effect for the time of the entire engagement. Because of the complexity and special skills required to make the initial classification, and the time it takes to monitor and ensure the contractor remains independent (and does not begin to look and act like an employee), many businesses are engaging third-party companies to classify workers and monitor compliance. By using an independent contractor engagement specialist to manage the classification of workers, an organization can focus on its core competencies and not worry about staying up-to-date on classification criteria and compliance best practices. Working with independent contractors is a great strategy to fill the need for special skills, benefit from the experience of specialists for distinct projects, and provide flexibility and cost savings. With the increasing population of highly skilled self-employed workers, it is critical that organizations embrace the free agent movement and be prepared to meet the unique engagement needs and legal requirement to capitalize on this unique talent pool. Taking advantage of the skills and expertise that independent contractors deliver involves additional steps to ensure compliance with the various classification requirements. Sometimes workers need to be reclassified, but other times, a business just needs to adjust how it engages with independent contractors. As an employment lawyer, Robert Shea of Morse, Barnes-Brown & Pendleton notes, "Many times, when we evaluate the situation, we see that the employers can make small changes in the way they use the independent contractors. That will allow them to continue using them, but also reduce their legal exposure significantly." Now is the right time to review how you engage with independent contractors in order to make sure you properly classify workers, and take any additional steps to protect your company from potential liability for misclassification. Nathan Gibson is vice president of managed services at Randstad Sourceright. With the increasing population of highly skilled self-employed workers, it is critical that organizations embrace the free agent movement and be prepared to meet the unique engagement needs and legal requirement to capitalize on this unique talent pool. Contingent Labor