Outsourcing the Management of Independent Contractors

Companies are always looking for ways to be more efficient when managing their workforce, while trying to be compliant with regulations. For this reason, partnering with a workforce solutions firm is an ideal solution. Many companies are making this change and outsourcing management for their independent contractors. With so many companies in lawsuits and audits over worker misclassification, along with the recent legislative actions by federal and state agencies related to engaging Independent Contractors (“IC”), many companies see the need to outsource the management of their Independent Contractors.

Kanita Brown, procurement and strategic sourcing leader and the managing partner of K.H.Brown Solutions, says:

“Many purchasing, procurement and HR professionals only have a tertiary understanding of the issues surrounding worker misclassification. Outsourcing the IC Compliance piece to the professionals makes good sense, instead of trying to manage it in-house. The governmental and legal environment is constantly changing, but most HR and Procurement folks just don’t have the time nor expertise to stay abreast of all the changes. Some companies have had to pay fines and penalties for worker misclassification but may not have been audited…yet.”

She goes on to say, “Senior management may be aware of some of the potential risks but are hesitant to make changes to their worker engagement processes, until it’s too late.”

ClearPath Workforce Management has seen some companies use their own IC evaluation process. They found that some internally developed programs are not comprehensive enough, nor up to date. Company policies on the IC contracts and Statements Of Work (SOW) didn’t provide adequate protection against misclassification issues and would benefit from guidance by industry experts. While HR and Procurement professionals tend to lead contingent labor programs, cross-functional collaboration is critical to developing a robust policy and process around ICs. Kanita says, “In my experience, it was the responsibility of HR and Procurement to engage and educate Contract Legal, Employment Legal, Risk Management, and Benefits about how IC misclassification impacted their work and the overall business.”

Is the message about the issues surrounding worker misclassification getting heard by the procurement and HR professionals? Are company Tax, Legal, and Risk departments concerned about worker misclassification? If they aren’t, they should be.

ClearPath Workforce Management’s risk mitigation services keep your IC engagement practices from spiraling out of control, enable the engagement of highly skilled talent, and expand your talent supply chain. ClearIC™ can automate and simplify the Independent Contractor evaluation process while mitigating your risk via our full-service IC vetting process. Contact ClearPath for a complimentary discovery call and 1:1 review of your current worker status. Let ClearPath be the path to your peace of mind.

Kanita Brown is a seasoned procurement and strategic sourcing executive, and the founder of K.H. Brown Solutions, a Certified WBENC consultancy firm that provides consulting, advisory services, supply chain management consulting, project delivery, and implementation.https://khbrownsolutions.com/