Recent news on the front lines of contingent worker and risk management highlight the need for program managers to be vigilant. New legislative efforts are underway to codify rules on joint employment and independent contractor usage. These efforts are not new, but continue to emerge at multiple jurisdictional levels (global, federal, state and local), as reported here in Contingent Workforce Strategies 3.0. Just in the last month, we have covered a US House Bill proposal that seeks to clarify the definition of joint-employment and North Carolina’s legal efforts to address independent contractor misclassification. Globally, the UK is considering creating a new legal distinction call for the “Dependent Contractor” to make it easier to distinguish between those freelance workers who are not in business of their own accord and the genuine independent contractor entrepreneur.
Most co-employment and worker misclassification rules have emerged from past court proceedings or government departmental rulings related to statutes such as the National Labor Relations Act and the Fair Labor Standards Act. There can also be a pendulum swing in enforcement when a new administration takes office. The difference with the recent US House bill is to codify the definition of joint employment, which would limit the impact of future government shifts and potentially future court proceedings.
Change is the only constant in this arena, and it’s not easy managing it. Handling this state of flux is based primarily in knowledge, preparedness and executing basic strategies: deploying CW program management policies to mitigate the risks of co-employment and workforce misclassification and creating a capability to be informed of the ebbs and flows of legislation and rules governing the engagement of contingent workforce talent in the markets you operate.
Fundamental risk mitigation strategies for co-employment and workforce misclassification are regularly covered in CWS 3.0, such as “Temps vs. ICs: Don’t mix them when crafting your risk mitigation strategies.” These articles describe a solid risk management foundation for a CW program — no matter how the winds blow in rules and regulations of the day. Certainly, new rules and regulations will require a periodic review of one’s mitigation strategies and policy. Additionally, periodical reviews will also need to take place in making sure that program rules governing the safe engagement of CW resources are not prohibitive and over burdensome.
A key CW program capability and sign of program maturity is tracking these evolving changes. Co-employment and independent contractor rules and regulations most often occur at the federal level, with worker misclassification governance and enforcement affected more aggressively at certain state levels. Organizations such as Staffing Industry Analysts and the American Staffing Association regularly track the ebbs and flows of legislation, regulations and rulings.
With a solid base of risk mitigation policy and governance in place, dealing with the inevitable changes is very doable. Subsequent, periodic reviews will be required when impactful governmental rule changes do occur. But equally important will be conducting periodic reviews of CW program risk mitigation policies/business governance that will need to support new competitive advantage emerging in CW program’s deployment of total talent acquisition and other future workforce resourcing strategies.
