Classifying your Labor Force as Independent Contractor or Employee
More companies today are becoming more reliant on the services provided by independent contractors. There is no surprise there as the gig economy has spiralled up in recent years.
According to an article posted on The Guardian workforce from the gig economy will be a major consideration because of its unprecedented growth. For instance, millennials are so enthusiastic to be a part of the gig economy because of its flexibility, independence and ability to work on mobile.
While there are specific laws that govern independent contractors, the government has become more aggressive than ever to ensure companies who hire them are in compliance with the law.
To avoid penalties, audits, or lawsuits, you must adhere to the rule especially when classifying your labour force as independent contractors or employees.
Why It Is So Important
Employees are given more benefits compared to independent contractors. They receive unemployment insurance, overtime pay, vacation and holiday pay, and other benefits. If you classify true employees as independent contractors just to save your business some money, then you are in big trouble!
The California Supreme Court ruling last April 30 2018, has the potential to change the game for the gig economy. More so, it provided a guideline in classifying independent contractors from employees.
If a worker performs a job that is in “usual course” of company’s business, then the worker is considered as an employee.
For example, an architect hired by an aviation company cannot be considered as an employee of that company. The business is all about aviation and the tasks performed by an architect to that company is not in the “usual course”.
There is an emphasis on the word would because there are other factors to be considered. A company should have a sufficient control over the worker before that worker can be considered as an employee.
Classifying your workers can be a difficult endeavour as clearly described above. You might even think that you’ve covered all your bases but there are other government agencies that you need to consider who might have different views on independent contractors. Knowing the labour law in your area is critical for a smooth business operation.
Outsource Your Staff from a Reliable Labor Provider
While the US is making the move to rule out the classifying independent contractors from employees. We indeed need to take this move into consideration in our business and ensure we are moving in the bright direction.
If you do not have a clear guideline for your company to classify independent contractors from employees, then the best strategy to implement is to outsource workers from a reliable labour provider.
Online workforce management like CrewGo can help you hire the best staff for your job requirements without worrying about worker’s classification. CrewGo puts your best interest in mind while making sure that the staff’s welfare is taken care of. CrewGo puts your mind at ease and ensures compliance with required rules and regulation.