Compliance & Worker Classification 101

Compliance. In the contingent workforce management world dictionary, there is no word that is more important.

Managing external contractors globally can be a complex undertaking given the various worker classification in every country. More complexities exist when you consider that a modern contingent workforce may consist of a multi-cultural mix of consultants and independent professionals, contractors, temps, freelancers and others.

You must also consider local, regional or national laws, visa types, worker classification and pay rates, health and safety training and obligations, contractor entitlements, and more. Governmental and client specific documentation, and record-keeping that’s associated with every aspect of contractor compliance, needs to be up-to-date and easily accessible, too.

The risks are high and the secondary effects of audits, taxes and penalties are massive. Not only in terms of significant financial penalties and insurance pay-outs but also regarding reputational damage and contractual risk. For example, if they are working on anything that could affect client contracts.

Ignorance is no defence, and in most countries Government agencies will regularly audit companies to ensure they are fully compliant.

On the other hand, if your company views contractor compliance as a fundamental aspect of  your workforce planning and invests in it properly, your company can benefit significantly. Benefits include: reduced operating costs, less hassles, a boost in productivity, an increase in contractor retention, as well as an enhanced employer brand. That is a big upside.

Along with risk mitigation and less stress, this is the reason why many smart businesses choose to partner with an experienced and reputable contractor management solutions company. A company with an extensive global experience and in-country offices to partner with your company.

In the complex world of compliance, a relatively small investment can save you a significant amount of time, money and hassle. Contractor management companies are specialists in determining and collecting all the contractor documentation you need. Having documentation as proof of a contractor’s qualifications, licences, and registrations, you acquire the audit trail you need to demonstrate your legislated due diligence.

Moreover, they also ensure you comply with all workplace health and safety regulations, and manage online inductions which can provide documented proof that your contractors have completed their general, site, or project-specific inductions.

One big upside from this partnership: owning a central repository for your data, insurance information, qualifications, security checks, safe systems of work, licenses, certificates, etc.

With an effective contractor compliance program, you can monitor your contractors immediately –  knowing, in real time, where the gaps in their compliance are. This will allow you to keep your workers safe, reduce business risk, and save valuable time, money and resources.

At CXC, we are fully aware of the critical importance of compliance management and   importance within the services we offer. CXC Comply, our Global Contractor Vetting and Compliance Technology Platform, is specially designed to assist with all the complex classification issues involved when engaging contractors globally.

Its impressive functionality currently services over 50 countries around the world, and broadly encompasses three key areas of compliance:

Worker Classification: CXC Comply’s classification assessment and vetting process ensures proper classification of independent, freelance, sole trader, limited company, and corporate contractors. It also mitigates any risks to your organisation by ensuring they adhere to local classification guidelines for taxation purposes and are set up properly and working in compliance with local and in-country laws.

Right to Work: Right to work requirements vary in every country. CXC Comply’s right to work assessments and digital vetting ensures the contractor that you want to engage has the proper work authorisation in the country or region where the work will be performed by verifying domestic right to work eligibility and proper setup within their country’s schemes.

Background Screening: CXC Comply ensures your contingent workers are properly checked and vetted by facilitating checks for issues such as criminal checks, education checks, work verification, international sanctions, and credit checks.

By any measure, employing and managing staff can be complex and challenging, especially if not managed properly. Have you been managing your employees compliantly?

To learn more about how CXC can help you better ensure contractor compliance and overall workforce management click here. You may also signup for an online demonstration of – don’t hesitate to contact us today on