Independent contractor compliance is no longer just about having the right to be independent – it’s about being able to prove it. As a business owner or manager, the defensibility of your independent contractor program is crucial, especially given recent rulemaking.    

So what happens if you’re suddenly faced with a misclassification claim? We’ve gathered eight essential questions to help your business build a framework for a more defensible independent contractor program, and help independent contractors retain their freedom to run their business. As a bonus, we’ll dive into how a technology platform such as Openforce can help prove compliance every step of the way.  

An independent contractor compliance framework  

Navigating the intricacies of independent contractor relationships demands a robust framework built on compliance, transparency, and defensibility. This framework serves as a guide to demonstrating compliance convincingly when faced with a misclassification claim.   

Now, let’s delve into the heart of this framework and learn how Openforce’s technology solutions help provide the evidence needed to fortify your independent contractor program. 

  1. How many of your contracts are signed? 

It may seem basic, but being able to provide signed contracts is critical in establishing a solid foundation for independent contractor status.  

Digital contract signing ensures a secure and traceable process. Openforce’s mobile-friendly contractor enrollments automatically collect and store critical compliance documents, complete with timestamped e-signatures, helping you to streamline your operations while providing a verifiable record of signed agreements.  

  1. How many contracts are in the name of the entity you are paying? 

Remember, you are not paying an employee – you are paying a business vendor. Ensure that contracts are correctly named and associated with the entity receiving payment to reinforce the legitimacy of the contractor arrangement.  

Openforce’s platform associates contracts directly with the entity receiving payment, promoting clarity and adherence to compliance standards by aligning contractual relationships with financial transactions. 

  1. Can you point to a document giving you the right to make each settlement deduction you have made?

Transparent financial transactions are crucial. Be prepared to demonstrate the legal basis for any settlement deductions you make, whether for damages, equipment, or other expenses.  

A robust documentation system lets you quickly retrieve and showcase the necessary documentation, proving the legitimacy of settlement deductions and reinforcing compliance with applicable regulations. 

  1. Can you prove alignment in the contract, dispatch records, pay, 1099s, and other details? 

Consistency is key. Establish a system to ensure all contractor relationships align seamlessly – from contract details to dispatch records, pay, and 1099 forms.  

Openforce’s integrated system helps you build seamless alignment between various elements of your contractor relationships, from contract details to pay and tax documentation. This comprehensive approach simplifies compliance and enhances your ability to prove alignment. 

  1. How will you prove that contractors chose to hire and fire subcontractors? 

Empowering contractors with the authority to hire and fire subcontractors is a significant factor in establishing their independent status.  

Master contractors are empowered to manage their subcontractors with Openforce, providing a digital trail demonstrating their autonomy in hiring and firing decisions – a key component in establishing compliance.  

  1. How will you prove that contractors advertised to other businesses? 

To effectively prove independent contractor status, it’s important to demonstrate that your contractors actively engage in marketing their services to other businesses.  

Openforce’s Delivery Driver Network offers independent contractors a free platform to advertise their services and qualifications to contracting companies looking to recruit. This platform enables contractors to advertise and grow their business while giving you what’s needed to help prove your case. 

  1. How will you prove that contractors worked with other businesses? 

Beyond advertising, illustrating the independent contractors’ ability to work with multiple clients (and proving that they do) is a key determinant in establishing independent contractor status.  

With hundreds of clients utilizing Openforce technology, independent contractors can easily work with multiple clients and still receive payments, manage contracts, get benefits, and more all in one spot, helping you prove contractors can and often do work with multiple clients.  

  1. How will you prove that contractors had insurance and paid for it? 

Insurance is a hallmark of a responsible and independent business. Ensure you have documented proof that contractors possess and actively pay for the necessary insurance.  

Through Openforce’s digital enrollment workflows, contractors are empowered to buy insurance and make informed business decisions regarding their coverage, reinforcing their independence. Since insurance premiums are deducted from settlements, you don’t have to wonder if policies are paid and active. 

Openforce helps prove compliance 

Openforce goes beyond facilitating compliance by actively assisting in providing proof of these essential questions. With a user-friendly platform that integrates contract management, financial transactions, and documentation, Openforce empowers businesses to build and maintain a better independent contractor model that helps independent contractors protect their freedom and run their businesses.  

Ready to embrace compliance with confidence? Schedule a call today to learn more.  

About Openforce

Openforce is the leader in technology-driven services that reduce operating costs and mitigate risk for companies using independent contractors. Our cloud-based applications help companies and contractors alike achieve more sustainable, profitable growth by removing financial, operational, and compliance barriers to getting business done.