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Global Workforce Podcast:

Exploring employee vs contractor compliance with Suresh Jones and Stan Broome

June 21, 2024
Discover crucial strategies for navigating employee vs contractor compliance with Suresh Jones and Stan Broome

Show notes


In a business environment where the wrong classification can cost you everything, understanding the distinction between employees and contractors has never been more crucial. On this episode, we’re joined by Omnipresent’s Senior Commercial Manager, Product, Suresh Jones, and Co-General Counsel and VP of Risk and Litigation, Stan Broome. They reveal the strategies that protect your company from costly misclassification risks whilst leveraging a flexible workforce.

Key Takeaways:

(02:04) Contractors are typically less expensive in the short term due to lower costs associated with taxes, social benefits and equipment. 

(03:27) Contractors offer flexibility, allowing businesses to quickly scale their workforce up or down. 

(04:07) Companies can access top talent quickly by hiring contractors for short-term projects. 

(05:30) Misclassification risks include compliance issues and potential legal repercussions. 

(06:11) Governments globally are shifting towards protecting workers, increasing scrutiny on contractor classifications. 

(09:19) Penalties for misclassification can include fines, back taxes and legal fees, as well as reputational damage. 

(16:01) Conducting regular misclassification risk assessments can help businesses stay compliant. 

(17:00) Having clear, compliant contracts and verifying contractor identities are crucial steps in managing classification risks.

Resources Mentioned:


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Video shorts


Hi there, and welcome to our live interview today, at Omnipresent. We are delighted to be, launching this this industry today based off of one of the most common, questions we get asked, the Omnipresent, all about, how to avoid misclassifying your global workforce in twenty twenty four. That's the title of the event today.

Before we dive in to, introduce today's guest, just note to anybody that's joining who wants to ask any question, you should see a panel button on the right hand side of your screen.

That's an opportunity for you to ask any questions you want toward the panel. If they're out, please ask as many questions as you if you'd like. We are gonna leave some q and a time at the end. And we'll go through each of these, line by line. Now I'm really excited about the webinar today because we're focusing on one of the most, common topic to get asked who are climate omnipresent, and that's the topic of contractors.

I'm delighted to be joined by a couple of my colleagues today, Suresh and Dan.

And why don't we start with some introductions? Suresh, I'll hand over to you first.

Yeah. Thanks, George. Hi, everybody. I'm Suresh Jones. I'm a senior commercial manager here at Omnipresent.

I lead the development and the launch and go to market of our new product. So, you know, the last few months, I've been busy, launching this contractors product. So this is a topic, misclassification, and risk that is that is very close to me. But, yeah, great to be here, and, thanks for coming.

Over to you, Thanks, Aras.

Hello, everyone. My name is Stan Broom. I serve as co general counsel for Omnipresent and, vice president of risk and litigation. Before joining Omnipresent, I did about twenty five years or so as a courtroom litigator, handling, business disputes of all kinds and certainly, had my share of run ins with topic we're gonna talk about today, myth classification. And I think he's one that that's near and dear to business owners and companies and and full of line landmines. So, happy to be here to discuss this, with you. So with that, back to you, George.

Awesome. Thank you, Beau.

Great. I'm really excited to be here today. As I mentioned, this is one of the most common questions we get asked on the present. We often get people coming to us who are trying to work out whether or not they should employ somebody as a full time, employee or a contractor, or maybe they have a contractor that they're considering, offering them a full time role and switching them to your art to a full time role.

Paresh, I'll come to you first.

What are the key, benefits in your mind of using contractors, this and and what are the key things companies should consider when they're making some of these decisions?

Yeah. Sure. So I think it's important to remember that nowadays, contractors are a normal part of the workforce. They're a normal part of business operations, and companies are really, really taking advantage of this.

So what are the advantages of contractors? Right? There's sort of three main ones, cost, time, and then flexibility.

So as compared to full time employees, contractors in the short term are less less expensive. Companies don't know you're worried about, you know, paying taxes, social benefit.

They don't need to provide equipment and office things. So sort of on the short term, contractors, are cheaper.

They're quick to onboard, and they're easier to offer. Right? They're easier to terminate. You know, they they have a contract.

And then flexibility. Right? You can flex contractor workforce up and down to to meet your business need.

And you can also get access to, you know, top notch tower. So, you know, I've spoken to lots of customers, spoken to lots of, you know, a lot in market, about contractors and kind of a really, really good use business case is, you know, stay that a company, meet to build a product, you know, in three months.

This product will require a certain engineering skill set, engineering skills, and hiring this as a full time employee. This could take three months, right, just just to fill that role.

But there is a contractor market that's readily available with a wide array of engineering built up that you need. So, you know, businesses will quickly onboard contractors to build out this product, you know, or their project.

And then, you know, you know, off board them, you know, as as see, that that's a great great use case of contract.

But now on the flip side, right, what are what are some of the things then potential downsides and risk you have to consider? Right?

Number one, contract aren't part of your company. Alright? They won't integrate as closely with your with your employee, and they're not really invested, you know, in the long term success, you know, of your business.

And while the cost benefit, may are are important in the beginning, they they may decrease over time. Right? That kind of ties into, you know, the an investment of the contractor. And then lastly, sort of the reason that we're here, to talk about is, you know, they it's complex. Right? There is compliance issues. There's worker rights issues, especially with taxes, work in class baseline, and that's that's the big thing that that you really need to really need to consider.

So, yeah, sort of the the pros and cons pros and cons of the reason. True.

Thanks, Duresh. That's a really helpful summary to get going with. Stan, perhaps it'd be a good time to sort of bring the lines. Duresh has called out, some of the some of the, compliance issues and and areas of maybe in a bit further.

How are you seeing different countries around the world approach this in in different ways?

I think the first thing you want to look at, and and to know about this topic when you're looking at it from a legal compliance point of view is that this, this area like many in the law, but especially in this area is very much, sort of like a pendulum, government swing back and forth.

And the two ends of this continuum are protecting workers, the employees, and, being pro business. And that pendulum swings back and forth over time. So how do you, manage, a legal analysis, especially when you're looking at global issues and misclassification and the simplest way to do that is to look for trends. And I'm happy to tell you that there's a definite trend going on right now across governments.

Really we're seeing this globally And, unfortunately for business, that has that trend is definitely going, towards the workers' side. So what does this mean? This means that governments are taking legislative steps and regulators are taking, steps to make sure that, contractors who are not really contractors, but look more like employees are given the protections that you would normally find, only given to employees and this can have, quite a repercussion on your business. So it's important to look at this and I'll give you just a few examples of how this trend is moving.

So in the United States, of just a few years ago, we would just sort of look at, a a control issue. So so who has the most control over the workers' schedule, time, salary, things like that? That moved to, what we call an economic reality test, which really sort of drove down on, okay, just because you can write a good job description and what's really happening on the ground with that, and that was a little more pro worker. And now just this last year, we we were waiting for these wigs to come out from the Department of Labor, and they've just, just landed and people are still sort of, trying to figure out what this is going to mean for their, individual business.

But from a trend perspective, they move from that economic reality test, and the Department of Labor said they're still keeping that test, but they added on top of it a totality of the circumstances test. And I wish we had more time. You could do an entire webinar, George, on, on those six new factors. But I think for, for our purposes today, if you just get the idea that governments are definitely swinging towards coming after businesses who misclassify their workers.

In the UK, the emphasis the point of emphasis has really been around tax collection, making sure that, you know, as as we all know, employees have their taxes withheld and and the employer is responsible for paying those taxes, but not true with a contractor. The contractor is responsible for, paying those taxes. So you can see that this area would be ripe for a lot of tax fraud and that's where the UK is focusing their regulatory influence. But there's one more trend.

That's very interesting to me. And, and it's worth noting here. Don't know how this is gonna play out, but a future trend, we can see in things like prop twenty two in California, where the California, United States required that the employer still give the contractor some of the traditional benefits that you would see only given to employees and this trend, the, in, in Spain, a similar situation is going on with their new writer's law, where would they classify delivery drivers, as employees for the purposes of securing their social security benefit. So if you take all this away and you take the minutia, which I would love to talk about if we had more more time, George, but I think, for the purposes of this call, just know that governments are doing more and more to make sure that workers are protected, not abused, and they get the benefits that you would normally see such as overtime, minimum wage, social security, those kinds of things, that, employers are burdened with whenever they decide to hire a true employee.

That's That's really interesting. So it sounds like the general pendulum is soaring more towards the the workers than than business, across lots of different countries. You mentioned a few there.

I'm I'm curious, though. So what would you expect, you know, given your background, over three, five years in in law, what would you expect a company to typically be penalized if they do get caught misclassifying employees as contractor?

Right. Let me give you two answers to that, George, because there's here's an easy answer that will check the box and make sure that we get through today.

But there's also some hidden costs. So there's some upfront costs that you could read the statute and see what that's going to be. But I really wanna also focus on some of the hidden costs because when you talk about both all the costs together of what happens to you as a business, if you misclassify someone, it it it can the seriousness of it becomes self apparent. So, there's always if a regulator finds that you've misclassified employees, there are always fines. There's the potential to have to pay in back, back pay all the taxes that you should have withheld.

You might have to contribute to a social security or worker's compensation program that you did not think that you would have to because you thought you had a contractor and not an employee.

And, you, but it gets worse. You could also, have an employee who claims that not only was I not a contractor, I was an employee, but I should have been paid overtime all this time. And the statute of limitations is unclear and moving in a lot of jurisdictions on that. You could have to go back even several years and fight over whether you did or did not owe overtime to somebody that you thought was a contractor.

So those are sort of the upfront what you expect, cost if you were doing a risk analysis on if you miss classify an employee, but there are other costs too.

As soon as the allegation is made, the first thing you'll probably do as a business is either internally or externally retain counsel. That's expensive, whether you're using up your own resources with your internal legal department or you're hiring outside counsel.

These kinds of things can get very expensive. So you may even find yourself in a situation where, okay, we can manage the risk of a thousand dollar fines, let's say, or we can manage the risk of paying back taxes.

We would have had to pay those taxes anyway. But you also, when you do a risk analysis and risk assessment, you have to think of those, soft costs and more difficult to calculate costs such as legal expenses to defend yourself in court. And then there's the, even softer cost of what of your company's these these types of cases tend to make headlines because, if you have a large company with a large number of misclassified workers, politicians and legislators love to get in front of cameras and talk about how they're protecting workers so you can have a reputation cost there too. So when we're thinking about the seriousness and importance of this topic, just going through that laundry list.

Makes it very self apparent that this is this can be a big deal to your business and impact your bottom line quickly.

Got it. So so just to summarize, we've got generally, we're seeing, local legislature sway more towards protecting employees than than business.

The cost of of getting, falling foul of this can be quite significant and bigger than you expect and include hard and soft cost.

But also, I guess the the final piece here is, like, how often or, like, how do these things get triggered? Because I'm guessing, you know, you're a UK company hiring somebody in Spain. Quite unlikely that the Spanish, it looks like they will knock on your door and say, hey. You've got a contractor in Spain.

That's right. Yeah. We have to keep this in perspective. So either the regulators are not just going for the most part, there are some jurisdictions that are that are, put more of an emphasis on, investigation than others. But for the most part, regulators are not just going down a phone book list and and investigating every single company for whether they do or do not have misclassified employees.

There are predictable times in a business life cycle though, where this comes up. And two of those that maybe which maybe we'll have time to talk about three of them, but, the two that come to mind are, in a any kind of due diligence process. So if your company is looking to IPO, if you're looking to do go through a merger, some sort of acquisition, the first thing that happens of course, is, a team of bankers and lawyers, usually, and accountants will do their due diligence. And if they find, if you're, let's just give the example that your company is being acquired by another company.

And, there's a lot of excitement or perhaps you're going through an IPO. There's a lot of excitement about this new opportunity and what it can mean for your company. And then you get into the due diligence. And if the acquiring company or the regulators handling the IPO, start looking down your list of workers and they see a big chunk of contractors that that's gonna be a red flag.

And they're going to immediately want to know if you've done the analysis to make sure that these are contractor and are, or should they or were they misclassified and they should be employees? The reason this is important to in a due diligence analysis is because of what we said just a few minutes ago, George, that if you do have contractors that should have been classified as employees and you go, they're at risk of the new company acquiring them or in an IPO situation.

The company could be at risk for some severe penalties such as the ones that we talked about before. So anytime your company is headed towards the due diligence, process, that is a time where you need to sit down beforehand and look through the contractors, check your job description and see if you've correctly classified that. And, and, and fix it if you haven't. If you've got a few that seem to have moved from the contractor position to an employee position, regulators generally are happy to see you, taking the initiative and, and and fixing those classification problems. So there's, there's one instance where that, really comes to the forefront. Another time and, and the most typical way that this gets raised to regulators are with disgruntled worker.

So as soon as you've got a worker who is is their contract is not going to be renewed or you're terminating them for whatever you're breaking the relationship for whatever reason.

That is the time that that worker is going to be looking for legal advice. And the first thing, any lawyer would ask is, let's look closely to see if you were misclassified. Maybe you should have gotten all those social security benefits. Maybe they should have been withholding taxes, that kind of thing.

And whether they're, whether the allegation is legitimate or whether it is a pretext just to help them with the negotiation as they're terminating the relationship. Doesn't really matter as far as your costs. You're going to have to look at that and it's going to be some cost incurred. And then I guess the third way we might mention is when, you have a big chunk of contractor who you're the employer is not withholding their taxes and the contractor is not paying their taxes, then that's another time that regulators really see that, that there might be a problem here and could be knocking at your door.

Got it. There's a few different ways that this could this could arise. I'm gonna ask you as you need to watch out for. Taresh, let me bring you back into the, into this now. So, I'm curious to hear your take on how, can we can practically identify and prevent misclassification.

Maybe there's a checklist or something people should be looking out for when they are evaluating their workforce and and what they should be, what what kind of yellow flags should they be looking for?

Yeah. Sure. I mean, so, you know, as we can as we can see by, you know, Stan talking about this misclassification subject that contractor misclassification isn't black or white. It's not like you're either compliant or you're not.

Ultimately, a matter of a legal court assessment. Right? You're getting in front of a court. You're getting in front of, you know, a a a a legal vetting, and they're deciding whether or not.

So, therefore, it's sort of to scale. So there is, you know, various things that you can do to make yourself more or less quiet. Right? So when I sort of think about what are the most important thing that you should be doing when thinking about, you know, worker classification.

There's sort of a theory that, you know, a checklist or items that sort of, you know, give you a certain level of comfort or protection.

Number one, you know, undergoing sort of a misclassification risk assessment. Right? Looking at and understanding the nature of the relationship that you have with your worker. You know, is this relationship defined, you know, to your best ability as a contractor relationship.

Another thing is the contract itself. Right? The contract is the legal document that's out the rules and the procedures, that govern govern relation.

Identity identity verification.

Right? That's the very important part, you know, you know, for the contractors.

You know, are they who they are they are? Who are they who they are they say?

You know, and, you know, you're you're sending payments. Right? Ultimately, then. So, you know, whenever you deal with payments, you're dealing with know your business, know your contractor AML, these sort of checks. So identity verification is important.

And then from a company, you know, that you wanna protect your intellectual property, you know, as well as your property policies because these contractors aren't part of your business.

And then, you know, for the onlyizing yourself, you know, generally on this topic. Right? You know, it is the ever changing landscape. You know? So article by the Internet or, you know, the fact that you're even at this webinar means that before.

So there are certain things that you can do as a business to increase, sort of your your comfort and your production against this classification.

Thanks, Suresh. And Stan, let me bring you on on this. What would your what would your advice be on this?

I think that if if you take nothing else away from this webinar, note me on this. Write a good job description. If you if you will work with your legal and your HR people, or in the case of what our business does with your, EOR provider, they can help you line up whatever jurisdiction you are in. We'll have a set of rules and guidelines that the courts and regulators look to when they're deciding this. Have those on one side of the page, have your job description on the other side of the table and and write a good job description. Make sure that you clearly define the role and the expectations for this potential contractor.

It specifies specifically, courts are starting to look at this, concept of how integral to the business is this person. And so clearly identify that and and say, if this is not something that's absolutely mission critical to what we do, write that down, and they will be more likely to be a contractor than otherwise.

Assess how much of the control the company will have over the worker schedule, tools, and work method. The one thing about a good job description is you have the power to put as much in it as you want to. So if, the contractor is willing to be providing his own, his his own, even subcontractors or his own tools or his own, setting his own schedule, be sure and put that into the job description, check if the worker can work with multiple clients. So literally put in there that, that this particular person put in the contract or the job description that this person is free to work for, competitors, for instance, something like that. That's that would be a good indication that this is a true contractor and not an employee.

Ensure that the contract actually reflects the relationship with clear terms. I know a lot of times, we, when we're writing either an employment contract or a job description, we want to sort of leave it vague so that, this person might be asked to do multiple jobs and things like that. Avoid that if you can. If you can write specifically, this will be his responsibilities or her responsibilities, and these will, and, and, and, and nothing else will be asked of this person. That's a good way that you can, put that type of employment contract in front of a regulator and say, we were not trying to sneak in a an employee by calling them a contractor.

Super. Thank you.

Okay. Right. So let me let me throw an example out there and and Suresh, maybe you can you can help me on this. So let's say you have someone who's working for you on a medium term project, maybe it's six months or something like that. What's the best way in your mind to manage that relationship, and what are some of the liability teams? Like, you've got a genuine contract team here.

Talk a bit about that.

Yeah. So, you know, I think first off, you wanna be using, you know, a contractor management, you know, platform that takes compliance and misclassification risk that you account. So, you know, we're talking on misclassification here, but contractor management is is a whole another part. You know? There there's the payments. There's the invoices. There's the documentation.

And, really, a platform is nice to manage that. But then when you're when you start talking about the compliance and the risk, you know, you really want a platform and a provider, you know, take that into account. You know? So, you know, when building our product, we've spoken to lots of businesses, you know, about contractor compliant.

You know, and because it's such a broad topic with so many different considerations, we were interested in which which compliance and misclassification aspects were most important to the business.

And then we spoke with our, you know, internal legal team, you know, people like Stan, you know, and other people doing the omnipresent to sort of marry them two together and said, what are the most important compliance that that you can be considering when building, you know, a contractor management product?

So we came up with a series of features or templates that, you know, we included in in in our product, to recommend against misclassification.

So, you know, one is the misclassification risk assessment, you know, which I mentioned before, understanding the nature of the relationship, that you have, you know, with the contractor.

Is it the right relationship?

Complying and point in contracts. So, you know, this is something that we are providing. Right? So, you know, you want a compliant contract in there, to lay things out, properly, you know, in in the eyes of law as as best possible.

Identity identity identity verification, you know, that's that's very important, you know, talking about payments. You know, there there's anti money laundering, KYC, KYB that that need to go through. So, you know, properly verifying, businesses and contractors, is an important part, you know, of the platform.

And then, you know, the businesses you need to protect your intellectual property, as well as your privacy policies.

So that is something that, you know, we built into the contracts as well as the product.

And then just, you know, generally arming, you know, customer with with general knowledge. Right? You know? So we, you know, we're putting out articles. We're holding webinar like this.

So, yeah, that's those those are sort of the compliance features that we feel are the most important and give give it a stop.


Got it. Sounds like you've, done a belt taken a belt and braces approach here. So if there are genuine contracts out there, then people are pretty well protected, under those, under that stretch you set you set out there. What if that's not enough pressure? Why people wanna put an extra padlock on top of that?

Yeah. Yeah. Sure. Right. So, you know, as mentioned before, you know, it it's not black and white, and different businesses, have different they have varying level of risk tolerance, how much risk we would take. And there is cases where businesses are saying we're using contractors, but we really, really wanna be sure, right, that we're okay.

So this is exactly why we built OmniProtect, which is the misclassification insurance. Right? So a misclassification insurance is an insurance that you can purchase on your contractor.

This prevent the this is an insurance for the business in the case in the case that the contractor is misclassified.

It covers legal costs, it covers penalties, it covers taxes, and it covers third party indemnities. So if you really, really wanna be sure, you know, this is this additional product that, you know, you can purchase, for, you know, for a small extra cost.

So, really, that sort of next level secure secure protection.

Got it. Thanks, Suresh.

What if you were to take the risk assessment and, actually, the risk assessment is saying, do you know what? Because there's probably this probably should be a an employee.

Talking a bit about that, what if you what if this employee is in a country where you don't have a legal entity?

What should you be doing in those?

Yeah. So in these, I would really say in businesses if businesses really, really wanna be sure, right, you know, hire them as a full time employee. Right? Because it's this sort of the misclassification thing is asking the misclassification is asking, should a contractor be a full time employee?

Right? That's what really the law is trying to say. So if you want to be, you know, if if your risk tolerance is is really, really low, you know, if you think it's a high risk, you don't wanna take that risk, then, you know, I they, you know, hire them at full time employee. And if you don't have an entity, you know, that's that's the employer of record, and that that's a fully compliant solution.

As soon as you hire them as an employee, that's that's work in the vacation. It's it's a nonissue.

So Got you.

That makes a lot of sense.

Let's say you've got an existing contractor.

So let me bring you in on this one. Let's say you've got an existing contractor, and you actually think that, you know, we're gonna, we're gonna raise some money. We're gonna go through a DD process. We could do that on the horizon. We're gonna move these, these, these contractors to full time employment. What are the key things you should be thinking about when going through that transition process?

Yeah. For, first of all, I might say, George, that this is a process that companies should go through all the time. You should have a regular review of your contractors and see if things have changed and they look more an employee now than they did when you first bought them on that happened, the natural course of, building relationships. And, you might have a key contractor who's just becoming more and more embedded.

So this idea of regularly reviewing is a good idea whether you're coming up on a due diligence or not. But if you are coming up on that kind of event, get ahead of the curve. Don't be afraid of it. Don't ignore it.

I think the biggest problem that we, we see in businesses is they just don't want to address. They know they have this big skeleton in their closet and they don't want to address it. But I would encourage people to get ahead of it because you can, you can do so many things to protect yourselves yourself if you address it, beforehand and not wait until you're in a situation where there's a disgruntled worker or a, a last minute, you know, review of due diligence before you're going through an acquisition. And let me get a little more specific so you know what what I mean here.

If you have someone who, you think might have been misclassified, there's nothing that says you can't rewrite their job description. There's nothing that says you can't change, their instructions on how they work with you. There's you have all the flexibility and all the cards until you wait too late. And then when you wait too late, everything's going to be looked at in hindsight as opposed to in forefront.

So the first thing I would, I would encourage people to do is do regular reviews of everyone they've classified as a contractor used, for example, the misclassification tool that omnipresent has and and just roll through those questions again and say, you know, are we exerting more, control over this particular person than perhaps we were when for first hired them? And then if you are acknowledge it, rewrite the job description, reissue a new employment contract if needed, renegotiate with the contractor, and and and just be right up front and transparent about that process. And then, I I I think that, you know, having some bit of, of backstop for those gray area cases like Suresh mentioned, the OmniProtect, that, that bit of insurance that even if we're wrong, we're going to be protected is great assurance for your investors when you go into the due diligence process.

And it's great insurance for those places where you don't really intend to misclassify somebody, but it really is a gray area.

If you look at the cases, you will find plenty of cases where you have similar SPAC patterns and courts go one direction or another direction for every five cases that might be pro worker. I could point you to another five cases that would be pro business in this analysis that makes it difficult to manage the risks. So having that extra bit of insurance behind you is absolutely critical to being able to run your business with predictability and not get caught into one of these regulatory investigation.

Yeah. Understood. I think if I might just share, some of my take from us on this topic. So we are in quite close to a lot of teams who who have managed this transition from, moving contractors to full time employment. And there's really the fourth thing that I would be really focused on active, but as we go through this transition, firstly is like salary and take home pay is a very complicated situation.

You don't know it's really hard to tell them what the current setup that the the contractors are declaring taxes, how they have structured themselves. Like, so when you're making that transition from what they're currently earning to what they will be earning, that's real, really, point consideration you need to make sure you get right and really work with a partner who knows what they're talking about to help you identify And really what you're trying, what you're trying to find out is what their overall take home pay is gonna be and they're gonna be grades or less. I think another thing that's really important is the employment contract. And again, working with a partner who can help you understand not just what is compliant by law, but also what flexibility you might be able to offer to the employee because this is a transition for them. They're gonna have to have that. You wanna make sure that they, they come along with you on every step of the journey.

Third is having, like a human led approach to this and making sure you've got a team of people who have had disgusting with people rather than just having, like, an automated contract that goes out, but then it's fixed and and doesn't you know, can't you can't be discussed. I think having like a human led approach, that is really important.

And the last thing I think here is benefit. Don't forget, like when you're moving from a contractor to a full employment relationship, you get statutory benefits. You might also want to start offering supplementary benefits to, again, having some expertise on hand to to help you and the employee navigate the situation, I think, is a crucial part and that that can lead to the successful failure of your transitions in that I've been doing.

Anything that either of you would add here, Suresh, anything you would you would add on on that, summary?

Yeah. And, you know, as you're as you're thinking about going, you know, contractor, you know, to full time in that transition. Right?

While, you know, this this is a common case, you know, that that we that we deal with, you know, quite frequently, but it's important to remember that this is case by case. Right? This is, you know, every case is a little bit different.

And, yes, while it's important to have a platform and a product and manage that, you really want sort of critiques in the background. You want experience.

You want people that have done this before, to kinda partner with you, you know, on it because you can't just press the button, you know, in the product or in boom, they convert. Right? There's a lot of things to consider, and they can be, you know, quite more.

But, again, that that's important, you know, when when speaking to providers and, you know, thinking about this transition effort.

Yeah. Absolutely. Than, anything you would add to that, the transition process?

Yeah. I I think I would just add that, it's a great way to don't I I hope that, in in pointing out the downside of misclassification that we also don't forget about the upside of having contractors on your, in your business. It is a fantastic way to jump into a new jurisdiction, a new country that you haven't worked in before. It's a fantastic way to hire some contractors. And and then, and then six months, twelve months, if it looks like things are working well and you wanna integrate them as full time employees, That is a natural transition that the law understands and recognizes. And your, your intent will not be questioned if over time they become more and more integral to your business.

The, the use of contractors, is also a great way to step into the global workforce. So you, if you've operated a business for a substantial amount of time domestically, and you want to put your toe in the water of hiring globally, I can't think of a better way to do it than to, than to hire a contractor. And in another place where the contractors are absolutely critical and always will be critical is in that role of, of helping you knock that one tough project. That's been a real blocker, out.

So you can quickly, come on to a platform such as ours, have an employment contract ready to go that you know is going to be juridically compliant, help with that job description, drafting and, get them, working on that project very quickly. And let's get, as an example, let's say you're a software company and there's this one bit of the coding that that's really been a blocker to your expansion. You can hire a few contractors quickly, get them onboarded, get that code project done. At the end of it, if you've hired, let's say three contractors to work on that, and you really liked this one person who was showing, lots of skill and, and seemed to integrate well with the other employees, in the, in the relationship with two of the contractors and pull that other contractor on as a full time employee.

It's a great way to, sort of low risk step into, new areas or or find some really, really talented individual.

Yeah. I couldn't agree more, Stein, to sort of fully aligned with what you're saying there.

When he, we're obviously just getting it together to run appropriate. So, we've we've talked more about employment model flexibility between full time employees and I mean, employer of record and contractor. I have my local train going past, and it's, it's been that lasted some time today.

Well, but, I think it's really important that you've got everybody's different. Every situation's different. Every country's different. Every employee and their role is different. So It was like there's a, you need a range of different options, but quite crucially, you need, some experts to help you through some of these situations because, there can be quite, quite happy penalties, but also can be some huge advantages, in this topic. Right.

Suresh, can you take your thoughts on this?

Yeah. Sure.

So kind of going, you know, going through that going through that transition, I guess.

So sorry, George. What what what exactly was the what the question about and what?

I was trying to draw a few draw a few of these points together. I guess so the question I was trying to really get to was, actually, a bit about the platform, and how some of these features might be best brought together under one roof.

And what do you in in terms of when you built the platform, what are the key considerations you've been making that, when you've been designing and building that?

Yeah. So, you know, just sort of to go back to standpoint. Right? You know, contractors are a great, you know, a great use case. You know, they're very important in today's business world.

So I think you just have to, you know, accept that and welcome that contractors are gonna be part of businesses, and employment. So you want a platform that caters to that and really help you onboard and manage your contract. Because we're talking about misclassification, but, you know, you have to pay them. You have to manage them. You know? There's some documents for that.

But then so a lot of that can be built in sort of a product back. Then, you know, behind the scenes, right, you have these more comp right? So you have misclassification, compliance, you have misapplication insurance, and these things are not so easy to productize.

So how do you kind of, you know, combine these these these, I would say, sort of human and nonhuman parts, you know, into a product.

And that's sort of the the challenge, as well as the excitement, you know, in in building a product. And, you know, that that's, you know, that I would like to say that, you know, at our omnipresent, you know, we did that well, you know, by building some sort of, the things that you can productize has been also bringing in that for teacher. So, you know, adding the help articles, adding employment contracts, adding a misclassification branch. Right? This is more more of a human time. And that kind of brings everything together into something that you could package up and say to businesses, alright. This is really useful for you, and it's gonna help you save money.

It's gonna help you save time, and it's gonna Yep.

I I think it's also very helpful to, the way that you put together this, Suresh, so that if you come on to the platform, you can go you can go to the misclassification tool. And without a lot of experience in this area, you can click through some some, some quick questions and help you decide is this person a contractor or employee? If it is a contractor, you get shot over to that side and you and instantly you get an employment contract that is compliant in whatever jurisdiction you're looking at. If you get to the end of the misclassification tool and you find that they it, this is, this is gonna be risky.

This may very well not be a contractor. This looks more like an employee. You just shoot over to that side of the platform. And so in one space, you can manage both your employees and your contractor and get some, some guidance along the way as to, as to, which one you should choose.

I think another thing too, just going the misclassification tool to me is the absolute key to it. Maybe I have a legal bias, of course, so maybe that's why I look at it that way. But I think the misclassification tool along with the insurance are game changer because you can put your HR people into the platform and they can go through some very, some questions that are, are intended for laypeople to use them. And it just says, will this person will this worker be doing x?

Will this worker, be maintaining his own schedule? Will this worker be required to work certain hours? And, and by the time you get through that mesh classification tool, it becomes very self evident of whether you probably have a contractor or, or, you know, maybe you just need to bite the bullet and bring on a full full fledged employee.

And the misclassification tool can also work this way. It can help you in deciding who you hire. So if you put a hypothetical through the misclassification tool and it doesn't work, you can say, okay, what can we change about this person that we're going to bring on so that they will be a contractor? And that's another, I think it's just really, really helpful. And then finally, just one more, pitch about the insurance thing.

As you know, as as lawyers, we can we we give the best advice we can, but can I protect the future and know exactly, you know, whether the regulator that happens to get assigned to your case is going to be a little more aggressive or a little less aggressive? I don't know the answer to that. So if you just know that you've got this peace of mind with the, with the OmniProtect standing behind you, that if anything does go wrong, that, it's not gonna cost your business, any money.

I think it's just a huge it's it's it's a game changer. So I think it will be a game changer for a lot of businesses.

Hundred percent.

Great. Well, look, I'm gonna, come to final locks in just a moment. But before I do, I wanna, check. There's a question we have come through the chat, and that's very much a plan broom question. It is. It gets get ready for this one. Question from Luca did in which jurisdictions do you see the highest risk due to authority practice and or potential consequences of misclassification.

Is there a difference between common law and civil law jurisdictions?

That that is a great question. So, George, just tell me and just stop me if I pontificate on this too long because, Lucas, you've you've you've hit on two or three really, really key things. And let me try to hit all of them and just encourage you that it, if you wanna talk further about this, reach out to me. I think that there'll be some way that they, that people could contact us us after this, George. So if I don't completely answer your question, let's chat some more because there's, there's a lot to your question. So just taking the first part in which jurisdictions do you see the highest risk?

Without giving you the lawyer answer of it depends. I will say that, if you are, let's say that you're in the United States, it varies drastically between which state you're in. So if you are in a state that historically is more worker friendly and worker protective, such as California, New York, Massachusetts, some places like that. You're going to see, local legislation on the ground that is more worker friendly and, penalties are higher from this classification. If you're in states, Texas, Arizona, New Mexico, Mississippi, Alabama, you're gonna see less protections for workers.

But as we get broader and we look at this from a global, impact, Germany is always going to be very protective of their workers as in Spain and Italy.

Very high risk, there, not just on this classification, but, when you do when someone is characterized as an employee, you're gonna really run into some high cost at the end of that relationship, no matter how they're terminated, if it's outside of resignation. I mean, any sort of termination is going to be a risky thing. So we actually keep, list of every single country, what their rules, what their laws are. And I can go into specifics with you, Lucas, if you have, or someone from our team can, if you have specific, places where you're thinking about hiring, we can absolutely say what our experiences have been in that country.

And then, is there a difference between common law and civil law jurisdictions? I love this question so much because, I, I actually went to a law school that, even though it was in the United States, it was based in civil law, which is highly unusual, but yet there was obviously a common law element. And I'm licensed in two states. One is a civil law, state and the other is a common law jurisdiction.

So I would have to say that your first part of your question probably hits as a practical matter on more of the things that you want to know, which countries, not necessarily common law versus civil law. Every every country, no matter whether it's common law or civil law, is interested in a few things that that hit on this. They're interested in, first and foremost, collecting their taxes. And so, it doesn't really matter if you're in a common law or civil law jurisdiction for that, that policy is still going to be the same and followed closely by making sure workers are not abused.

So I have, I don't know that I've really thought deeply about whether common law or civil law would lead to a tighter misclassification, but I can tell you that, all governments are worried about this to some degree. But your question is absolutely, on point. The first part of your question that some countries, the enforcement arm is, they're putting a bigger emphasis on enforcement now than in other places. And and as I said at the beginning, just to be clear, that in every country across the globe, we see a trend more towards protecting workers, which means that businesses have a higher risk of being held accountable for, misclassification.

Brilliant. Thank you, Tom.

So I wanna prompt you a bit both on my following my general question, we've finished. So, I think all three of us have been in the present for a little while now. So what I'd love to do is to get your reflections in your learning.

I've been here for quite a long time and and in Spanish, so having been in law for so many years and then, and then finding the short army president.

Key takeaways that you've had since you've, since you've joined army president. I'm happy to, to go first and, and share some of my key reflections. I've been here for almost two years now.

The biggest thing for me is that, I've kind of alluded to it earlier, every situation, every employee are different. And when you're navigating these situations with every country being different as well, the most important thing in my mind is to over communicate. Over communicate to the client, over communicate with them. Really make sure everything is not just written down in an email at once, but also you also speak to people.

You also have calls. You also have gen genuine dialogue, and you have that to your interaction. We're in a high trust human led business, and it's really important that you that you have, have that human led approach and and you over communicate on everything. No matter how small we think it might be, it's actually really important to somebody, who's who's being, employee.

Suresh, let me go to you next. What is some of your key reflections on key lens, etcetera, and?

Yeah. Sure.

So, I mean, the whole field of, you know, HR and employment is, like, it's changed so rapidly. Right? In the span of five years, we went from pretty much everybody going into the office now to being, you know, having remote and hybrid work is is a norm. Right? And this made something like employment of record, which was once quite niche. Like, this is pretty mainstream now. Right?

And now we're really seeing sort of the rise of contractor, you know, freelancers, the economy. Right? This is this is really, really shooting up. Right? They're saying by twenty twenty five, half of the US workforce is gonna be contractors.

And that makes things complex because on top of that, operating and running businesses is is becoming more and more Right? And regulation is always playing.

So as a business, right, usually, most businesses, your core your core function is not HR employment.

You know, it it's something else. Right? You're making your money money somewhere else. But your employees and the way you employ is such a critical part of your business, but it's something that you're really not gonna have expertise in. Right?

But the you know? So you really wanna be partnering with somebody and sort of, you know, outsourcing this. Right? And working with a provider that really And nowadays, it's great that you can do that.

You might not have been able to do this twenty years ago when you had had to deal with everything. But because the business landscape is changing so much and becoming, you know, so complex and regulation is picking up, you have contractors, full time employees, all these things. I think, you know, it's really important to partner and sort of, you know, you know, out controlling the key parts of your business because, you know, building a business is hard. Probably yeah.

Yeah. Absolutely. Couldn't agree more. And and, Stan, how about you? You've been at Omnipresent for a while now. What have been the key learnings that you, you've made since you've been here?

I would say, maybe this isn't surprising coming from a lawyer, but I would say don't be afraid of the risk. Learn about it. If you can, the the idea of hiring globally and and hiring someone who might be half a world away from you, but could, could really add value to your company is not undoable. That is a that there are certainly risk involved, but you can partner with someone who can tell you what those risks are, and then you can manage them.

So I think the the most, exciting part of, of my switch switch from private practice over to being with Omnipresent is watching, people do what they thought was impossible, and that is retain a global workforce and and do it in a way that that is compliant, that that allows them to sleep at night. And that's because you weren't afraid of the risk. Instead, you took the time to work with a company that understands the risk and can share those risks and then share what, compliance solutions might be available to you. And then, and then try it.

It's, you know, hire a contractor in a few different countries and, and, and see what that looks like. And, you can do it. You can step into it's it's a good way to step into an bring your business to a level that it has never been for.

I'm I'm fond of saying when I talk about hiring globally that there has always been more ability than, than, what there's always been more ability than opportunity.

And, there are a lot of really, really talented people out there and they can, they can make a difference at your company. Don't be afraid of the risk, learn about the risk, and then you can manage it.

Yeah. I I couldn't agree more. Running teams that I'm president over the last few years has been really an eye opener for me about the possibility of of hiring anyone anywhere.

I've got team members now in South Africa, Bahrain, Bulgaria, and Gran Canaria, and everywhere else in between. It's that there's a huge opportunity here to hire the best people regardless of where they are. I think like you say, it's time to embrace it and, and not be scared of it and, and view it as much as you can.

Fantastic. Thank you both so much for the input today. I've really enjoyed the conversation.

If there are any if there's anybody on the webinar who, would like to follow-up and have any further discussions with Dan, Suresh, or maybe even me, maybe even another question for me, unlikely, but possible. I'll then name that. I'm sure we'll be sending you some email communications if you have to get in touch. Thank you so much, both of you. Have a great afternoon, and we'll see.

Cheers. Thanks.

Cheers. Bye bye.

George Britton
Director of Sales

George Britton is the Director of Sales at Omnipresent, known for his rapid career advancement and leadership in sales across tech companies and is praised for his sales acumen and team guidance.

Stan Broome
Co-General Counsel and Director of Litigation & Risk Management

Stan is a highly experienced attorney with 25 years of business + litigation expertise. At Omnipresent, he is the Co-General Counsel and Director of Litigation & Risk Management.

Suresh Jones
Senior Commercial Manager

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