As your company grows, in any sector or industry, you’ll likely face the challenge of building a team to handle the growing number of projects. Choosing to hire employees or independent contractors is a major decision you’ll make along the way. Whether you hire employees or independent contractors, it’s important that you understand the rules and regulations that differentiate these two “classifications”.
At the 2018 National Association of Field Mortgage Services conference, the increasing awareness of misclassifying independent contractors was highlighted as a major concern for the industry. Judge Ruth B. Kraft provided insight into the pitfalls and perils companies face by misclassifying workers as independent contractors.
The New Qualifying Analysis of Workers
Previously, the analysis of whether an employee qualified as an independent contractor versus an employee was incredibly black-and-white, leaving little exception for gray-area or context in any such position, company, or industry. Control or dictation over work performed would often lead to an audit, which invoked a specific 20-Point Checklist.
The previous version of the IRS checklist involved asking:
- Whether the company gives instruction
- Whether the company provides training
- Whether the worker is hired, supervised and paid by the company
- Whether the company sets the working hours
- Whether the company furnishes tools or materials
- Whether the worker can work for other businesses
…and similar. However, the new qualifier of independent contractors as employees includes new sections on behavioral control analysis, which dives into the type of instruction, the degree of instruction and financial control over the worker. You can review the determining factors and more here.
With the new method to analyze and determine whether or not a worker is truly an independent contractor or employee, companies must prove that workers are continuously free from both direction and control. What should a company do? A single unemployment filing can result in major, multi-agency and multi-state audits on a business, costing thousands and potentially millions of dollars in damages.
How should companies proceed with hiring independent contractors to delegate critical projects and tasks? Pruvan’s mobile app can help employers “uncheck” those boxes in misclassifying independent contractors while also providing contractors with the flexibility and the freedom they need to get the work done. See how:
Facilitate Contractors Ability to Work with Multiple Providers
While companies often store their projects and tasks in one specific platform and would often like workers to do the same, requiring a contractor to use specific software or tools could result in ruling that an employer is dictating control. However, Pruvan’s mobile app allows flexibility for users to work for multiple providers. By having their own account, contractors can complete work for multiple entities. Additionally, the Pruvan app offers free custom branding, making it feel like a seamless extension of any business.
Remove the Burden of Training and Onboarding
As a company, it can be difficult to navigate training contractors without crossing the line of employer control over how to perform the work. It is a tough situation to manage while the company wants to ensure work is performed properly, but they can’t dictate the work being done. The best way to eliminate this pitfall is by shifting the burden of training or eliminating it altogether.
While the latter is not always feasible, Pruvan offers a solution that benefits both employers and contractors by providing onboarding and training along with first-line support for those using the app or portal. Providing this service negates employer responsibilities in liaising contractors regarding how they use the app or online portal.
Providing support is incredibly beneficial for contractors, who are often subject to dealing with the employer regarding technical issues or questions. When they use Pruvan’s mobile app, contractors are empowered to work exclusively with Pruvan to navigate any difficulties or questions about the app or online portal.
Allow Flexibility Over Project Completion
Eliminating employer control over work and projects is a major indicator in determining whether someone is an employee or independent contractor. With no gray area or context analyzed in those IRS checklists, a wide range of actions could easily fall into this category. Pruvan helps employers eliminate control by offering:
- Accept/Reject functionality inside the mobile app
- Offering multiple workflow options
- Allowing for flexibility within integrated orders
For many other software or platforms, the nature of the work required from the employer could fall prey to the “sequence of work” determining factor in employee classification. Therefore, by providing a contractor with a form that is not customizable or changeable, the employer is in the most technical sense dictating how the contractor performs work. While contractors are expected to complete surveys and forms, Pruvan provides flexibility by allowing them to impose their own workflows , allowing them to complete areas of the form either manually or via the mobile app.
Support Multi-tiered Subcontracting
Think contractors are the only option? Pruvan’s mobile app supports multi-tiered work, allowing the use of subcontractors in projects or tasks. Contractors have the flexibility to create workflow and sub-assign work to their own contractors, further separating the liability of employer-dictated control between employers and contractors.
Pruvan aims to help clients meet their goals and provide flexibility for vendors and contractors that utilize the mobile app. Contractors can look to Pruvan for consolidating work in one place while maintaining flexibility and autonomy in their workflow. Property preservation companies can use Pruvan to replace older processes and apps without having to build their own custom solution.
What are you waiting for? Sign up for the Pruvan mobile app today!