z ent l aw g roup adding value to business counsel ™ contingent workforce processes and issues for...
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ZENT LAW GROUPAdding Value to Business Counsel™
Contingent Workforce Processes and Issues
For Legal Department
Presentation by Zent Law Group
ZENT LAW GROUPAdding Value to Business Counsel™
Why You Need to Know about the Contingent Workforce
Legal Risk to the Company if defined processes are not followed.
Legal Risk to the Company if workers are mischaracterized.
Loss of Intellectual Property if certain contingent workers are not approved by legal (such as Academics and Professional Experts).
Economic impact to the company and departmental staffing budgets if worker claims result from failure to follow company staffing process.
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Consequences of Misclassification
Federal Government
– Internal Revenue Service
– Bureau of Immigration and Customs Enforcement
– Department of Labor State Government
– Income Tax
– Unemployment Premiums Legal Claims by Workers
– Stock Purchase Plan
– Stock Option Plan
– 401k Plan
– Wrongful termination, discrimination
– Workers’ compensation
– Overtime, accrued benefits
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Understanding the Workforce
ZENT LAW GROUPAdding Value to Business Counsel™
Understanding the Workforce
Typically Long Term or Seasonal
Staffing Needs
Short-Term Temporary Staffing Needs
Typically Long Term Staffing Needs
Often used for unique, one-time projects
EmployeeOutsourced Service
Providers (OSPs)
Agency Temporary Worker
Consultant/Contractor
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Employees
Fills open requisitions and short term (internship) roles
Eligible for company benefits
Paid by company
Uses company tools & equipment
Works under direction and control from company
ZENT LAW GROUPAdding Value to Business Counsel™
Agency Temporary Worker
Fill “short-term”, “flexible,” “project based” positions
Legal employees of a temp agency
Receive W-2 from agency employer at year end
Uses company tools & equipment
Works at company offices
Taxes paid by temp agency
Given specific instructions by company
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Outsourced Service Providers (OSPs)
Service provider with multiple employees providing service to company (Deloitte, etc.)
Generally paid by invoice for services
Uses own tools & equipment
Works under their own direction
Carry all required insurances
Generally project staffing at their own discretion
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Consultant/Contractor
Performs a unique service Self Employed Works for multiple clients at same time Paid upon milestones or project completion Receive Form 1099 from company at year end Uses own tools & equipment Pays their own taxes quarterly Works under their own direction Carries required insurances Sometimes consist of Academics/
Professional Experts
ZENT LAW GROUPAdding Value to Business Counsel™
Procedures for Hiring
ZENT LAW GROUPAdding Value to Business Counsel™
Procedures for HiringContingent Workers
Employees are Processed by Company’s Human Resources Department
OSP’s are processed by the Purchasing Department
Contractors/Consultants/Academics/Experts are evaluated and processed by Company’s designated Staffing Agency
Agency Temps are processed by Company’s designated Staffing Agency
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OSP Engagement Process
OSPs are engaged through the Purchasing Department OSPs must execute the Company’s form of Purchase
Agreement Under the Purchase Agreement, OSPs:
– Are required to be entirely responsible for their employees and subcontractors
– Pay all wages, taxes and withholding of their employees and subcontractors
– Carry insurance, including workers compensation for their employees
– Carry all insurance that the Company requires of OSPs, and
– Require their subs to carry all such insurance.
ZENT LAW GROUPAdding Value to Business Counsel™
Staffing Agency Evaluation Process
1. Applies to Consultant or Agency Temp
2. Collect information and evaluate contractor for compliance with IRS, EDD, and DOL
3. Recommendation made within 24 hours of receipt of all required documents
4. If an Agency Temp, then Staffing Agency hires and payrolls worker to eliminate company’s risk
5. In event of an audit, Staffing Agency maintains a compliance file
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Documents Reviewed for Consultant Evaluation
Articles of Incorporation (only required if incorporated) Professional Liability Insurance (Errors & Omissions) Commercial General Liability Insurance Automobile Liability Business License (only if required in city working in) Evidence of most recent clients other than Company
(Invoices) Evidence of recognition in contractor’s field Evidence of Taxes paid Federal Employer Tax ID Number (not Social Security) Fictitious Business Name Statement (DBA) Proof of advertising/marketing materials Proof of Published Works
ZENT LAW GROUPAdding Value to Business Counsel™
Documents Reviewed for Academics/Professional Expert
Automobile Liability (if driving)
Evidence of recognition in your field
Evidence of an understanding for the release of all IP from the Expert’s employer to Client
Certification of Taxes Paid
Curriculum Vitae (C.V.) (Resume) or
Evidence of current employment or
Proof of Published Works
Statement of Work
ZENT LAW GROUPAdding Value to Business Counsel™
Thank YouContact Information: Monica Zent
Zent Law Group, PC1298 Kifer Road, Suite 509Sunnyvale, CA 94086Tel. 408-736-3600 (Ext. 3601)[email protected]