Archive for co-employment

The IRS 20-Factor Test for Determining Who Is an Employee

July 12, 2012CSS Services, Independent Contractors, Life at work1 Comment

By Alexandra Zatarain

The 20-factor test is used as an aid by the IRS to determine whether an employment relationship exists between the individual and the firm under common law rules, for federal employment tax purposes. The factors are applied to the given factual situations to determine whether the individual is an employee of the firm for such purposes.

These factors have been developed based on an examination of cases and rulings considering whether an individual is an employee. As Edward E. Lenz highlights in his book Co-Employment, “the degree of importance of each factor varies depending on the occupation and the factual context in which the services are performed.”

Steering Away From Co-Employment Liabilities

July 11, 2012CSS Services, Independent Contractors, Life at workLeave a comment

“In today’s workplace, traditional employment relationships are changing. Flexibility is the watchword, for both employers and workers. Companies are establishing smaller “core” workforces and supplementing them with part-time and temporary workers in a variety of alternative employment arrangements. Some businesses are outsourcing employer responsibilities under ‘professional employer’ arrangements that often are confused with staffing services.”

Edward A. Lenz, Co-Employment

By Alexandra Zatarain

Co-employment relationships are established between two or more business, where each has actual or potential legal obligations and rights as an employer in respect to the same employee. Obligations can include providing wages, benefits, paying and withholding taxes, insurance, and more.

When the facts and circumstances align, the law imposes obligations on the employer towards the employee. Because of the nature of the staffing firm’s work, both the firm and the end client will have enough contact with the employee so that both will be viewed by the law as employer.

Mitigate the Risks with Co-Employment Best Practices

July 10, 2012CSS Services, Independent Contractors, Life at workLeave a comment

By Alexandra Zatarain

There are risks coming in from everywhere, surrounding contingent employment and subjecting all the parties to high-stakes liabilities.

But there are a number of best practices that can minimize these risks and, if carried out diligently, even avoid them.

These best practices are directly related with different elements of the contingent employment relationship, from recruiting to background checks. All of these elements have to be carefully monitored to make sure both the client company and the agency are acting according to standards.

Watch Out! Co-Employment 101

July 9, 2012Independent Contractors, Life at work1 Comment

By Alexandra Zatarain

(With information from the Contingent Workforce Risk Management Toolkit of the Department of Human Resources Management of the Commonwealth of Virginia)

An important risk involved with a contingent workforce is co-employment.

Co-employment occurs when a contingent worker is considered an agency employee for the purposes of employment law and/or taxation. It is the employment relationship in which a contingent worker is viewed as working as a common law employee for an agency as well as an employee of the contractor.