Temp Staffing Insurance: Misclassifications Cause Trouble
Employee misclassification is a growing problem for American businesses, lawmakers and workers. It is not uncommon for businesses working with temporary staffing agencies or independent contractors to assume that these workers do not fall under the common law employee standards, which is often not the case. In truth, both independent contractors and temporary workers can be considered common law employees which means that businesses that employee these individuals need to add them to their total employee count in your Affordable Care Act calculation or risk incurring a hefty fine.
Each year, American employers incorrectly classify millions of workers as independent contractors, instead of employees according to officials and the IRS considers worker misclassification one of the major causes of the tax gap. The IRS has been cracking down on employee misclassification in recent years in an attempt to closely monitor companies to ensure compliance with applicable regulations.
The penalties of employee misclassification are substantial. According to experts, a mid-sized company with 250 full-time employees would have to pay an annual penalty of $340,000 in 2015 which increases to an even loftier $440,000, after this year. Furthermore, the U.S. Department of Labor recently pledged to increase its collaboration with the IRS to regulate and penalize employers for errors in their worker classification practices.
As regulatory agencies at all levels increase their scrutiny of business and employment practices to enforce compliment with ever changing regulations, including the Affordable Care Act, it is crucial to make sure that temp staffing agencies and their clients are properly classifying its workers and complying with all regulations to avoid legal and regulatory complications.
At World Wide Specialty Programs we understand the unique and unpredictable nature of the staffing industry. That’s why we specialize in ensuring that staffing industry members attain the insurance coverage they need to succeed. We proudly offer a comprehensive portfolio of temporary staffing agency insurance solutions to help brokers secure everything from EPL to professional liability coverage for their clients. Give our temp staffing insurance specialists a call today at (877) 256-0468 to learn more about all our staffing agency solutions.