Insights

5 Benefits of 3rd Party Compliance Vendors

As unemployment rates continue to drop and the candidate market remains competitive, resources with unique and high-demand skillsets are looking at flexible employment options. Working as an independent contractor enables them to promote their capabilities to more employers with flexible schedules and the ability to set their price. In an ever-changing climate for employers seeking to hire top talent, employers must often consider new talent channels, including Independent Contractors (IC). We explore how 3rd party compliance vendors can help manage all your independent contractors.

The Risk of Managing Independent Contractors on Your Own

Unfortunately, independent contractors open the door to increased scrutiny and risk. Clients must be vigilant in ensuring they have the correct contracts, insurance, onboarding protocols, and payment structure to always remain in compliance.

One of the most effective ways to ensure these items are in place is to leverage a 3rd party compliance vendor or payroll provider to help onboard and manage Independent Contractors.

 

5 Benefits of 3rd Party Compliance Vendors

Utilizing a 3rd party compliance payroll provider that handles Independent Contractors’ administrative management through an established and formalized process is the best way to reduce risk and deliver efficiencies while also resulting in savings. Whether engaging a payroll provider directly or with an MSP’s assistance, the benefits to this type of relationship are not ones to be overlooked.

Below are some of the key benefits of using a 3rd party compliance vendor for IC compliance:

#1. Absorbing the Risk for You

The payroll provider will assume all risks associated with the contingent workers’ classification and typically indemnify the client against potential legal outcomes.

#2. Proper Contractor Classification and Compliance

They will ensure proper classification by conducting a thorough analysis of the resource, the job request, and management style. They will also provide ongoing compliance by holding the client accountable via periodic engagement audits.

#3. Extended Available Insurance Markets

This model will also help bridge the gap on the higher insurance limits that an IC may not afford. This helps to open the market and opportunity for both the client and resources.

#4. Efficient Contract Structure

A client can expect a simplified contract structure to execute just one agreement with the payroll provider, who will then implement direct agreements with each IC. This is a way to ensure consistent terms and reduce the volume of contract requests with a client’s legal team.

#5. Streamlined Onboarding and Payroll Processes

This process will also help streamline all onboarding and payments. Once contracts are complete, clients will have one POC to complete onboarding and ensure the contractor is set up compliantly. The payroll provider will also handle all reconciliation and invoice processing directly with the resources. This allows the client to process one consolidated invoice for all independent contractors.

 

Monument Consulting: A Highly Rated MSP for Your Independent Contractors

At Monument Consulting, we understand the importance of managing your contingent workforce in the most optimized and efficient manner. Therefore, our team uses the industry’s leading vendor management systems to streamline our managed service provider programs. Additionally, we offer contingent workforce management consulting services to share our staff’s expertise on how to operate your contingent workforce at maximum efficiency.

Are you looking to connect with Monument Consulting? Contact us today to ask about our contingent workforce consulting or managed service provider (MSP) services!