HRO Today December 2014 - 52

Contingent Labor
* Receives a " 1099 " form for tax purposes versus a W-2;
* Typically works as an individual;
* Often referred to as a consultant or freelancer;
* Paid through purchase orders or accounts payable
processes; and
* Any non-employee that does not have taxes withheld
per pay period.
Once you have a general sense of what defines an
independent contractor, it's imperative that you go a step
further. This means properly classifying these workers
through a series of criteria that determine the degree
of control and independence that is at play. Often, this
involves leaders from a number of different departments
within an organization, including the CEO, CFO, CHRO,
general counsel, and contingent workforce program
director.
Proper independent contractor classification should
include these three factors:
1. Behavior control. This area of classification is based on
whether or not a company is directing or controlling how
a worker does their actual work. Behavior control factors
fall into the below categories:
* Training and instructions;
* Reports;
* Hours of work;
* Location of work; and
* Assistants.
2. Financial control. For this particular focus area,
companies must ask themselves whether or not they have
the right to control the economic parts of a worker's job
with their organization. This can include a wide variety of
considerations:
* Significant investment;
* Paid by the job;
* Own tools and equipment;
* Worker's services are made available to the general
public;
[52]
HRO TODAY MAGAZINE
| DECEMBER 2014
* Business expenses; and
* Profit or loss on a job.
3. Relationship of the parties. The big question here is:
How do the worker and business view their relationship
with the other? Is there a written contact? What types
of benefits does the worker receive? Is the worker at the
core of the business? Organizations should review:
* Intent of the parties;
* Termination - what is the permanency of the
arrangement?;
* Firm's core business;
* Benefits provided; and
* Liable for breach.
To minimize financial risk and gain a clear understanding
of how significant that risk may be, businesses must
take all of these factors into consideration. Sometimes,
the case is cut and dry whether or not a worker is an
employee or independent contractor. More often than
not, though, a few factors will point to a worker as an
employee, while others will declare them an independent
contractor. This gray area can be tricky to navigate.
Especially because, according to the IRS, " there is no
'magic' or set number of factors that 'makes' the worker
an employee or an independent contractor, and no one
factor stands alone in making this determination. Also,
factors which are relevant in one situation may not be
relevant in another. "
As businesses continue to leverage the contingent
workforce alongside constantly changing classification
parameters, there will inevitably be challenges,
roadblocks, and hurdles. The key is to shine a light
on these issues so that the reality is clear and murky
perceptions are cast aside. Then, companies can move
forward in ensuring that they are taking the steps
necessary to fully harness the power of the labor market.
Dana Shaw is chief operating officer of ICon Professional Services.
She leads the development and execution of ICon's product and
service strategy, partnerships, worldwide sales, marketing, and dayto-day
operations.

HRO Today December 2014

Table of Contents for the Digital Edition of HRO Today December 2014

HRO Today December 2014 - 1
HRO Today December 2014 - 2
HRO Today December 2014 - 3
HRO Today December 2014 - 4
HRO Today December 2014 - 5
HRO Today December 2014 - 6
HRO Today December 2014 - 7
HRO Today December 2014 - 8
HRO Today December 2014 - 9
HRO Today December 2014 - 10
HRO Today December 2014 - 11
HRO Today December 2014 - 12
HRO Today December 2014 - 13
HRO Today December 2014 - 14
HRO Today December 2014 - 15
HRO Today December 2014 - 16
HRO Today December 2014 - 17
HRO Today December 2014 - 18
HRO Today December 2014 - 19
HRO Today December 2014 - 20
HRO Today December 2014 - 21
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