MBO Partners discusses what is co-employment and offers recommendation on how to avoid co-employment risks.
How Can I Avoid Co-Employment Risk?
While a co-employment agreement can relieve companies of some of the administrative burdens of independent contractor engagement, it does not eliminate inherent risks. Here are four steps you can take to avoid co-employment risk:
1. Ensure Independent Contractors are Properly Classified
To avoid being audited for employee misclassification, it is important to ensure that any independent contractor you engage is properly vetted and classified. Use federal government, state government, and government agency tests as guidelines to assess potential workers and keep documents on file that support their status. If you are working with a staffing agency, make sure they have a classification process in place.
2. Avoid Creating an Employer-Employee Relationship
You and your team may develop good working relationships with independent contractors, but it’s important not to place yourself in an employer-employee position. Implement specific policies and procedures for how your managers and employees should interact with independent contractors. As much as you may value the services of an independent contractor, they are not your employee.
3. Treat Independent Contractors as a Business
Control is an important factor in determining worker status. Co-employment agreements do not protect you from unsafe management of independent contractors. Unlike a full-time employee, an independent worker has freedom in how they meet the obligations of the project contract. For example, unless their work requires them to be on site, you should not require them to work from your offices. Remember, an independent contractor is a business and should be treated as such.
4. Work with an Established Independent Contractor Engagement Firm
Partnering with an established firm can help you navigate these processes and procedures, lower your risk, and assist in compliantly engaging independent talent. Companies like MBO Partners have years of experience and solid methodologies for evaluating and engaging independent talent for clients.
Read the full story at What is Co-Employment? | MBO Partners