HR can follow these 3 steps to minimize misclassification of gig economy workers | Fisher Phillips
As the gig economy continues to grow and labor shortage issues continue to mount, human resources departments may feel pressure to ensure appropriate separation between independent contractors and those employed by the ‘organization. While HR can play a key role in supporting the business functions performed by gig economy contractors, it is essential to ensure that HR departments do not “manage” contractors independent so that the courts or government agencies conclude that these contractors are misclassified. and should in fact be considered employees. This is an even more acute concern given that the Department of Labor has indicated that it will continue to prioritize actions to prevent and remedy the misclassification of workers as independent contractors. What are three key steps your HR department can take to minimize the risk of misclassification scenarios?
1. Consider Proven Gig Platforms
On-demand work apps and gig platforms can meet staffing needs during the busiest seasons and automate the hiring process. Employers in various sectors are already turning to gig platforms to quickly tap into pools of skilled labor. Food delivery companies, for example, have the ability to hire short-term delivery drivers during peak hours or during events like the Super Bowl that stretch staffing demands.
By leveraging on-demand work apps, you can not only create separation with independent contractors, but also streamline their onboarding processes. In addition to creating separation, on-demand hiring platforms eliminate recruitment delays and allow you to effectively retain and onboard workers for short-term needs during peak demand cycles.
2. Keep track of talent
In order to retain experienced independent contractors with well-aligned skills for the job at hand, human resource departments can create and maintain a database of independent contractors who have performed work for the company. By developing and maintaining a roster of experienced freelancers, you can quickly notify skilled workers of assignments when the need arises. By relying on experienced workers, HR departments can avoid having to manage or train freelancers who are unfamiliar with the tasks at hand.
3. Position workers to succeed
Finally, you can also create programs for independent contractors to self-monitor their expenses to reduce their potential tax burden, track their work done for the business, and reduce the amount of direct communication between the independent contractor and your organization. By preparing forms and processes related to the completion of work, you can reduce the risk of independent contractors being actively managed by human resources departments. You can also prepare standard correspondence to send to site workers at the end of each project to streamline the process of closing the relationship with the independent contractor.