As a business, it’s important to understand that changes in a workforce model come with changes in legal regulations. There’s also a chance of being exposed to unnecessary risks that relate back to misclassification. If your company fails to meet certain regulatory requirements, you could be at risk for a tax audit and even a lawsuit. It’s also essential for your company to be protected with General Staffing Liability.
According to an article in Staffing Industry Analysts, the importance of proper classification is necessary.
For regulations and revenue: The Department of Treasury has now viewed misclassification as a potential source of revenue. Penalties as much as $15,000 can be levied for each misclassified individual. This goes to show that a simply mistake can come at a big price.
For penalties: New California laws allow for accelerated penalties. This means that as California state agencies share information among themselves, they can all take action. Not only will penalties arise from the state or federal agency, but from multiple agencies.
For mitigating the risks: As a business, you should make it your mission to be aware of all legal regulations and map out an effective human capital management plan that mitigates legal exposure. To keep innovation, productivity and cost saving in check, develop the right management strategy. You can have a flexible workforce while minimizing any risk of non-compliance.
At World Wide Speciality Programs, we are committed to monitoring the staffing industry at both the regulatory and business levels. We focus on identifying emerging trends and provide exceptional coverage. We understand the risks and liabilities one faces in the staffing industry and we want to help by offering the best insurance products and services around. For more information, call us today at 877.256.0468