Misclassification of workers is a widespread problem that can seriously affect employers. When workers are classified as independent contractors rather than employees, companies aren’t required to provide their workers with benefits such as healthcare and a minimum wage. An employee of record service helps prevent misclassification by transferring the employees who work in your business to their payroll systems and managing other aspects of their employment.
It means that your workers are classified as employees instead of independent contractors, and you are required to provide them with benefits such as healthcare and a minimum wage.
Truck drivers are the backbone of the economy, delivering the products and services that people use every day. But when they’re misclassified as independent contractors, it can have devastating consequences for truck drivers and their families. We’ve seen this happen before with companies like FedEx, but now it’s happened again with XPO Logistics, one of the largest logistics companies in the country.
On the surface, it may seem like nothing more than a public relations nightmare for XPO Logistics, but this actually means millions of dollars in back pay and other damages.
What Businesses Can Learn from This
Be Honest with Your Workers
XPO Logistics should never have misclassified XPO truck drivers as independent contractors for the purposes of payroll. It was an error on their part, and they need to be honest with their workers, pay them what they are owed, and take the necessary steps to ensure it never happens again.
While we can’t go back and change the past, we can take steps to ensure it doesn’t happen again in the future. We recommend that business leaders avoid taking steps that will deliberately take advantage of their employees as they are the business’s prime foundation. By setting a good example, we can help change the culture of businesses to be more fair, honest, and compassionate, which will protect both the business and the employees.
Avoid Worker Misclassification
Worker misclassification can have disastrous consequences, not only financially but also for employees. Business leaders must speak out against worker misclassification and understand what is at stake by speaking out against this practice. Business leaders should establish open and honest communications with their workers to all work together and avoid worker misclassification.
We recommend that all business leaders make sure that workers in their organizations understand the laws and regulations that protect their rights. Business leaders should also develop employee handbooks that clearly explain how their rights and benefits are protected and include examples of violations of those rights. If workers see that their leaders are fair and honest, they are more likely to be fair and honest themselves.
Hire an Employee of Record Service
Worker misclassification is a common practice, but businesses can avoid it by hiring an employee of record service. These companies work with businesses to transfer their employees into their employment system and ensure that all benefits, retirement, and payroll taxes are paid. It allows businesses to save money, take advantage of more efficient payroll systems, and protect their workers from these actions in the future.
We recommend that all business leaders start by evaluating their operations to ensure that they comply with all laws and regulations. If they find that they are not, they should then develop a plan to bring their business into compliance with all laws and regulations.
Are You Looking for an Employee of Record Service?
An employee of record service is an organization’s reliable partner in ensuring that their employees get the benefits they deserve. Sometimes it’s easy for businesses to overlook certain aspects of employee satisfaction because of all the operations running simultaneously.
Thankfully, agencies like ClearPath are here to help and relieve businesses of the hassle and responsibilities of keeping track of these systems. If your business also needs the kind of help that an employee of service offers, give us a call today to schedule a consultation.