As the gig economy continues to spread across industries, the Society of Human Resources (SHRM) believes there’s potential for an even more limited definition of independent contractor on the horizon. With the increased demand for project work and use of contract workers, accurately classifying nonemployees can be taxing. Even for the most experienced management teams, staying ahead of labor laws and trends can be a challenge. However, flexibility is required for continued innovation and scaling.
To help you navigate recent changes, our Talent Tech Team is collaborating with VectorVMS to explain how Engagent™ communicates with Vendor Management Systems (VMS) to relieve your independent contractor compliance growing pains.
This 7-Step Process Shows How We Automate IC Classifications within Your VMS:
Get started in 1-2-3:
In VectorVMS, you simply select a worker who has opted to be engaged as a potential IC. This prompts both the worker and their assignment information to be push to Atrium’s Engagent™ tool for IC classification sorting. Atrium’s compliance team then reviews the assignment information for additional assurance. The information is automated to VectorVMS via the requisition that’s been shared.
The worker is now prompted to register within the Atrium Engagent™ tool. Once registered, a self-scheduler application enables them to book time to speak with the Atrium compliance team. This completes the initial qualification process.
Classify Workers for independent contractor compliance:
If the team anticipates the worker to meet independent contractor compliance guidelines, a worker questionnaire is sent for completion. The worker is asked to provide details about their business, financial setup and upcoming assignment.
In order to classify a worker as a compliant IC (1099) or a contingent employee (W-2), the Atrium compliance teams must review the assignment details and information from the worker in full for a comprehensive evaluation.
Automate IC Classifications in Your VMS:
Once the classification is determined, the status is pushed back to VectorVMS. The team then confirms with the hiring manager if the worker is classified as a compliant IC (1099) or the worker is recommended as a contingent employee (W-2).
Depending on the classification outcome, Atrium’s role varies in one of two ways to assure independent contractor compliance:
- In the instance of a 1099, the client is indemnified and Atrium serves as the paying Agent of Record (AOR) for the assignment.
- If the worker is recommended as a contingent employee (W-2), they should be engaged by an Employer of Record (EOR) payrolling provider, such as Atrium.
Helping people and their organizations succeed is a perk of the job! So, think of my team as the human resource of HR Tech. Our service approach to technology keeps us unbiased. You can trust us with candid conversations. That way we identify solutions that benefit you most.
As a partner for comprehensive talent strategies, there’s no shortage of flexible solutions for you to consider. If you have questions about Talent Technology and automating independent contractor compliance, I’m here to help. Beyond that, I’d love to be an industry resource to you if you’re seeking feedback regarding your HR Systems and Partners. Connect with me directly via VMiller@atriumworks.com.
