Concerns about contractor compliance are a major factor for the majority of startups, mid-sized businesses and large corporations, when it comes to international expansion or engaging talent overseas.
Since the events of 2020, the world has become even smaller. Technology has played a major role in enabling us to connect in both our personal and professional lives, when we haven’t been able to physically.
In the United States, Canada and indeed the rest of the world, remote teams have become the new normal. Human resources and workforce strategies have been adapted to include hybrid working models. As a result of imposed travel restrictions, organizations have had to find ways to engage workers from multiple locations around the world. Likewise, workers that had previously travelled to foreign locations to perform work, have had to find alternative ways to source their work and perform tasks remotely. Technology has made this possible and sometimes as seamlessly as if they were next door.
ACCESS TO TALENT
Today, workers can be sourced, engaged and managed from anywhere. Subsequently organizations have adopted a more flexible approach to their contingent workforces domestically in the U.S. and across the globe.
Research from a number of sources, including Deloitte and Harvard Business Review, suggest that in a few short years, about half of the workforce will be contingent. As the industry changes, the bridge between HR-managed and procurement-managed programs is crossed more often.
Those same companies often struggle to deal with the complicated issues surrounding worker classification, including vetting and compliance for a global contingent workforce. A major part of any decision around managing contingent labor revolves around the selection of technology.
Most companies using contingent labor and talent communities have some degree of worry around compliance and the risk that it generates. What do companies need to do to make sure they’re in full compliance? Are there differences for U.S. and global firms? Misclassification can be costly to an organization.
We’ve listed below 5 ways to minimize risk when engaging contingent talent locally and overseas.
- REPEATABLE IC & CORP. TO CORP. VETTING AND ONBOARDING GLOBALLY
Ensure your company is efficiently managing in-house or outsourcing the process assessing the set up and establishment of all IC’s and Corp. to Corp. Contractors. Processes should be compliant with in country laws, consistent and repeatable for all contractors your company is looking to engage.
- DETERMINE THE MINIMUM CRITERIA FOR BUSINESS ESTABLISHMENT, INSURANCE AND TREASURY.
Work with your risk department to ensure a minimum level of insurance coverages are in place. What truly counts as a business establishment within a country? Payments should only be made to a verifiable registered bank account.
- ALIGN CONTRACTS TO COMPLY WITH IN COUNTRY STANDARDS
Contracts should be available in local language reviewed by internal legal counsel or an external partner. Ensure full disclosure of project expectations, timeframes, and consequences for missed milestones.
- UNDERSTAND DIFFERENCES BETWEEN EMPLOYED AND INDEPENDENT / CORP. TO CORP. CONTRACTORS
Ensure that the independent, self employed and Corp. to Corp. contractors your company is utilizing, have no overlaps with employed workers, “full time or contingent”. Make sure excessive controls are not placed over Independents and Corp. to Corp. contractors. Ensure no fringe benefits are offered
- GET EXTERNAL ADVICE FROM EXPERIENCED COMPANY
If solely managing inhouse or you have no polices / processes in place, consult with a company who can not only bring in-country compliance knowledge to your company, but can share best practices utilized by similar companies to reduce workforce classification risk
Providing a solid base for startups is fundamental, to enable them to focus on their core business execution and growth. CXC provides such a base assisting enterprises to setup operations around the globe and will enter new regions as the needs of our clients determine.
Startups can now launch in new territories with maximum efficiency and pace, underpinned by a strong compliance framework.
The establishment of subsidiary or new entities overseas is often a difficult and cumbersome process. A global partner such as CXC, who can also provide “in country” HR services and employee onboarding services, enables startups to focus on their core business, and ensures their employees are engaged, productive and that the company is fully compliant with local employment laws.
HIRE ANYWHERE WITH CXC COMPLY
CXC Global, since its inception in 1992 has maintained a focus on compliance, enabling companies to engage talent compliantly, both locally and internationally, in keeping with local in-country laws.
CXC Global’s proprietary global independent contractor compliance SaaS platform CXC COMPLY, offers global IC and Corp to Corp vetting and workforce classification with full indemnification. CXC COMPLY was developed in the Salesforce cloud environment, allowing full integration.
Key functionality includes:
- Worker Classification
- Right to Work
- Global Contractor Payments / Payroll
Get in touch with one of our team to book a demo of CXC COMPLY.