Erudite Risk’s Post

From our global desk: The Biden administration enacted a new labour rule Tuesday that aims to prevent the misclassification of workers as “independent contractors,” a step that could bolster both legal protections and compensation for many in the U.S. workforce. The changes have long been viewed as especially bad news for companies like Uber and DoorDash — pioneers of the so-called gig economy, in which companies essentially rely on armies of freelance drivers, delivery people and others to provide services without traditional labour protections. https://lnkd.in/ghiPdZ7B #HR #GigEconomy

The Platform Workers Directive could, unexpectedly, be passed by the end of Belgium's EU presidency. The compromise text gained support from a majority of employment, social affairs, and health ministers during their summit in Brussels. Many freelance platforms, including those in IT, could face a substantial impact. According to the directive, platform workers will be considered employees if they meet at least two out of five specific criteria: control over pay and working hours, performance monitoring, task allocation and distribution, control over working conditions (e.g., breaks, dress code, or conduct), and restrictions on work organization. Member states may amend the list. The European Parliament is expected to vote on the agreement in April 2024. https://lnkd.in/dAEpTrvs

Is gig economy impacting Payroll??? Yes!!! Gig economy is playing crucial role in reshaping the future of work. Workers <--- independent contractors or freelancers. Major changes W.R.T Payroll: Invoicing <--- Workers may need to submit invoices with details such as the services provided, hours worked, rates, and payment instructions. Compliance and Legal Considerations <--- New regulations to protect gig workers' rights and ensure fair working conditions.

AB5 in California has already had harsh effects on the local labor market.... Is this a look into the future with the PRO Act? According to a recent study from Mercatus, researchers found: -Self-employment jobs declined by nearly 11 percent -Employment overall fell by 4.4 percent in California as a result of the law - An increase in the cost of labor, as employers are subject to higher wage expenses and additional payroll taxes “While these regulations provide important benefits to workers, they also increase the cost of labor, which may reduce employment, hours worked, or wages,” the study concluded. Though the goal of the law was to have workers’ titles change from contractor to employee, the result was fewer job opportunities overall, the study found. “Our findings suggest that AB 5 likely did not merely induce employers to reclassify some independent contractors as employees and that it resulted in a significant decline in self-employment and overall employment,” the researchers wrote. With the nationwide regulation, researchers determined this could come with a cost to the national labor market.

Over 2 years ago I decided to change the Soundings® business model to ensure workers' classification compliance giving us the ability to pay our talent as employees and freelancers. It was grueling, time-consuming, and expensive to make this change but my gut told me it was the right thing to do for our customers, talent, and our business. There have been many days that I have questioned if I made the right decision, especially as I watched our competitors stay true to freelance-only staffing models. Stories like this reinforce why we invested in the changes we did. This is only the beginning folks, especially for hospitality and events. They are cracking down on workers' classification federally and state by state. Invest in workers' classification compliance now or you will be exponentially investing in back pay, fines, and legal fees later. https://lnkd.in/gCWJH5VR

The U.S. Department of Labor (DOL) has introduced the Final Rule on Employee or Independent Contractor Classification, which was published in the Federal Register on January 10, 2024. This critical update aims to help employers correctly classify workers under the Fair Labor Standards Act (FLSA). Read the full article here... https://lnkd.in/geYP9REv #CPAforFreelancers #FreelanceTaxes

As more organizations are developing #strategies geared towards the #management of freelancers/Independents Contractors, tax authorities are continuing to crack down on the criteria that qualifies working as a #gigworker. The #misclassification of #workers—a practice where #employees are erroneously labeled as #contractors—can lead to grave #consequences for both #companies and workers alike. The #consequences of worker misclassification are far-reaching. Companies may face #lawsuits demanding unpaid #wages, #taxes and #benefits. #Government agencies can impose #fines and #penalties for failing to meet tax #obligations and #laborregulations. Such cases can tarnish a company's reputation, disrupt operations and drain valuable resources that could have been invested elsewhere. Leaning on an organization like CXC can help your organization to ensure compliant management of your domestic and global workforce. #CXCComply #Compliance #Misclassification #ICManagement #ICMisclassification #RightToWork #ICEC #IC #ICEvaluationCriteria #GlobalCompliance #ComplianceAtCore https://lnkd.in/gKzhfJzD

This is damning. Two-thirds of self-employed workers don’t believe that any of the major political parties represent their best interests – can you blame them? This was one of the key findings from Qdos Contractor’s annual survey, completed by around 900 freelancers, contractors and self-employed workers. Whether an election is held this year or early next, the self-employed could have a big role to play in deciding who leads the next government. Find out what our CEO, Seb Maley, had to say about it in Business Matters Magazine… #selfemployment #flexibleworking #freelancing #contracting

Hiring independent contractors? Find out how to pay your 1099 workers and stay compliant with regulations. Check out this article for a detailed guide on getting it right. #IndependentContractors #Compliance #Payroll #Paycor #HCMTechnology

Will be interesting to see if this will actually modify the perception that companies have around the materiality of the risk, and in turn expand the number of outside roles that come to market. 🤔