How do you manage your contingent workers effectively to protect them and your business from compliance risks?
Risk exposure is unavoidable for every small to mid-market and large enterprise. Compliance and regulatory failure are costly risks that organizations must learn to mitigate. As the global demand for contingent workers and independent contractors arises, this generates new challenges and more complex risks across the international market.
Organizations commonly have structured HR policies and procedures for permanent workers. However, there aren’t enough strong policies protecting businesses and contractors from potential risks related to contingent workforce compliance. Compliance risk can damage the integrity and reputation of the business.
CXC provides contractor compliance solutions to guide your business as you navigate compliance risks. With over 50 in-country offices across five continents and decades of experience, we are well-positioned to optimize all elements of your contingent workforce strategy.
Read on to find out more about compliance, associated risks and answers to some comment questions about compliance.[/vc_column_text]
HOW CAN CXC HELP?
As one of the world’s leading providers of contingent worker management solutions, CXC assists organizations in engaging and managing their evolving contingent workforce arrangements.
To do this, we:
- Implement the right governance framework for your business and your contingent workforce to ensure you and your workers are not exposed to a range of workforce risks, including tax, insurance, immigration and co-employment.
- Mitigate evolving regulatory risks by constantly reviewing legislation changes. We work with our external tax, law and immigration partners to continually update and implement a compliance and governance framework.
IS COMPLIANCE RISK DIFFERENT FROM REGULATORY RISK?
Compliance risk refers to the potential exposure of a business to legal and financial penalties or failure to act on government laws or industry regulations.
It happens when:
- the business fails to conduct due diligence on new customers
- there are insufficient financial controls due to misreporting or human errors
- there’s no corporate compliance training in place for contingent workers
Regulatory risk, on the other hand, is caused by changes in the laws and regulations, which can lead to potential losses in the business.
The effects could:
- increase the cost of operating the business
- potentially make the business practice illegal
- impact the competition in the industry
WHAT ARE THE MOST COMMON COMPLIANCE RISKS?
Compliance risks can be identified as legal, financial and reputational risks. Legal risks could result in penalties, fines or imprisonment. Financial risks impact the business’s potential future income and loss of investor confidence. Reputational risk affects customer perception and trust.
We’ve listed below some of the most common types of compliance risk:
- Political and social pressures
- Security breach and data privacy
- Health and safety standards
- Lack of disaster preparedness
WHAT IS CXC’S RISK DIAGNOSTIC TOOL?
CXC developed its own risk diagnostic tool to help organizations assess whether every contractor in their workforce is compliant.
HOW DOES CXC KEEP UPDATED WITH LEGISLATIVE CHANGES?
CXC ensures up-to-date monitoring of current legal, regulatory and taxation developments. We have an in-house compliance and HR team with years of experience built on our 30+ years in business, as well as an external network of legal and compliance experts, HR practitioners and tax professionals.
Additionally, CXC advocates educating our clients about the best practices in mitigating compliance risks when managing contingent workers.