Contingent workforce compliance

Automate contingent workforce management to mitigate compliance risk

While businesses increasingly depend on non-employee talent, governments worldwide at all levels are enacting laws and regulations governing the use of external workers and contractors. This is often done to safeguard workers’ rights and benefits, as well as to ensure that applicable taxes are collected.

Three leading compliance concerns

While there are many ways for a company to expose themselves to compliance risk, three of the most common are:

1. Lack of workforce visibility. It is easy for workers — such as former executives on retainer, service workers (e.g., janitors, landscapers, security guards, etc.), or workers in countries without rigorous non-employee sourcing and onboarding programs — to be untracked. This can create serious issues for the organization – especially if the company is subjected to a compliance audit.
2. Classification of workers. Compliance imposed by government regulators apply differently from country to country and industry to industry. Labor regulations are becoming more stringent and it is important for your company to identify, properly classify – and, if necessary, reclassify – all non-employee workers performing services for your business.
3. Handing of personal data. Talent acquisition and the management of contingent workers requires the processing and transmission of variety types of personal data. Collection and use of personal data must be done fairly, transparently, consensually, and in compliance with all legal obligations. Regulatory changes, such as GDPR in Europe, have significantly heightened compliance requirements regarding the handling of personal data.

These are just a few examples of the legal and regulatory environments contingent workforce programs must navigate as they source and manage non-employee workers. Fortunately, technology is available to automate contingent labor sourcing and management, reducing the chance of misclassification or other compliance risks.