Emergent Blog

Five Reasons You Can't Afford To Ignore the Temporary Staffing Side of Your Business

2012-05-14T14:54:00Z

1.) Your Competitors Just Doubled Their Profits.
Privately owned staffing companies have more than doubled their net profit margins since 2009 and have experienced nearly 21% sales growth over the last 12 months. The Contingent Workforce has more than DOUBLED since 1990 and with companies shifting towards having a more flexible workforce, this model of employment looks set to dominate the market over the next decade or so. Investing the time into the temporary staffing side of your business now will help you get ahead of your competition.

2.) Secure Your Future With A New Revenue Stream.
Although the amount of money recruiters can make in one hit from a direct placement is undeniably great, the numbers of opportunities recruiters are getting to make those kinds of placements are becoming fewer and further between. Companies are still reluctant to hire full-time internal employees so investing some time into growing your temporary placement business could help secure your future. Your contractors will make you money every hour they work, so you’ll receive a steady income regardless of whether you make a permanent placement that week.

3.) You Can Make More Money With Temp Staffing Than In The Past.
A temp is no longer “just a temp” these days. Many temporary workers are highly paid contractors, project-based workers and consultants on high bill rates and many are VP level or above. The biggest areas of growth in the contingent workforce are Software Developers, IT workers and Engineers earning upwards of $100 an hour. With just one of these workers out in the field, you could make $20 per hour or $3200 a month on that one individual. If this contractor has a 6 month assignment, that could translate into around $20,000. If you had 5 of these folks out at any given time, you could make in the neighborhood of six figures in that same 6 month period. In a year, that could total to around $200,000 in gross profits. Think temps are worth turning your attention to now?!

4.) You’ll Win More Business From Existing Clients.
Providing high-quality contractors to your existing clients can help you serve them better by enabling them to work around hiring freezes and offering temp-to-hire placements so they can “try before they buy” candidates who they might be nervous about hiring immediately on a direct hire basis. The best thing is, if they decide to convert the worker to a full-time employee, you can get paid twice! Also, opportunities sometimes arise for a project where a client may want XXX number of workers. Now you can capture those opportunities because you no longer have to worry about cash flow, insurances, HR support, etc.

5.) It’s really, really simple and doesn’t take much time.
In our conversations with recruiters, we often hear “Yeah, I know I SHOULD pay more attention to growing the temp staffing side of my business, but I just don’t have the time”. In fact, all it involves is asking your existing clients if they are in need of any temporary help and telling them that you are ready and willing to help. Around 90% of U.S. companies use temporary workers so your clients are already using contingent workers - you’re just not getting paid for it, yet!

DISCLAIMER - Emergent maintains its blog, website and other content as a courtesy for the general informational purposes of our readers on matters of interest in the contingent labor services sector. Nothing on this blog or any part of Emergent's website is intended to create any contractual or other legal relationship between the reader and Emergent or any of Emergent's staff, and none of Emergent's blog or website should be construed as any legal advice or professional opinion for handling a specific factual situation. Though Emergent strives to publish the most current information on topics of reader interest, Emergent cannot guarantee or warrant the accuracy or completeness of posted information in any way. Readers should not act upon any posted information on the Emergent blog or website without consulting with the appropriate legal, financial, or other business professional for guidance and advice.

Legal Update: California Wage and Hour Law

2012-04-19T14:54:00Z

Last week, the California Supreme Court ruled that employers are not obligated to ensure that workers take their legally mandated lunch breaks. Under California law, employers must provide an uninterrupted, thirty minute meal break for their employees after five hours of work, unless their working day is completed in six hours.

“We conclude an employer’s obligation is to relieve its employee of all duty, with the employee thereafter at liberty to use the meal period for whatever purpose he or she desires, but the employer need not ensure that no work is done,” the court ruled.

The ruling – nine years in the making – is perceived as a win for California employers who hope the ruling will reduce future class-action lawsuits surrounding the meal break issue in California, which has cost employers millions of dollars in legal fees.

Of course, while there is no legal obligation to ensure that the workers take their legally mandated rest breaks, employers should implement steps that enable their workers to take their breaks – such as providing relief coverage for thirty minutes – and proper scheduling arrangements that ensure work is able to be completed without having to compel employees to work through breaks.

Employers must also strive to document those thirty minute breaks correctly, by getting workers to clock out when they take their lunch break and clock back in again when work resumes. Taking these measures should ensure that there is no room for confusion or grounds for litigation.

In realty, office life is unpredictable and sometimes you may have to ask an employee to work through their lunch during a busy period. If the employee agrees to work through their thirty minutes break, you MUST pay a meal penalty (California law requires employers to pay one hour of wages for a missed half-hour meal break).

California Wage and Hour Laws apply to ALL employees, even contingent workers who may undertake projects for your company but who are employed by a third party. It’s worth checking whether your third party employer implements industry best practices and is up to date on the latest Wage and Hour Laws. If not, your company could be held liable, even though you’re not the employer of the worker.

Bill Inman Interviewed at 2012 Electronic Recruiting Expo

2012-04-02T14:54:00Z

Emergent President, Bill Inman was interviewed at the ERE Expo by HR Happy Hour Host, Steve Boese a couple of weeks ago about the growth of the contingent workforce and his predictions for the industry’s future.

In the interview, Bill covers a variety of topics including “just-in-time” talent acquisition strategies and changing attitudes towards the contingent way of working by employees and employers alike.

He also discusses the risk management issues that the growth of the contingent workforce is highlighting.

Interview Questions Include:

* What is the contingent workforce? (temporary and project-based labor)

* Why is the contingent workforce growing fast

* What types of contingent workforce jobs are growing quickly?

* Why do companies use contingent workers?

* What is the international outlook for contingent labor?

* Who is Emergent (emergent.com)?

2012 ERE Expo Conference Interview from Bill Inman on Vimeo.

What You Need to Be Aware of When Processing Payroll Internally

2012-03-19T14:54:00Z

Although processing payroll may seem as easy as printing a check. You should be aware of the many complexities that come with being an employer. The laws have become so complex that keeping up on the changing rules for each state requires extensive time and resources. The following are some of the areas that you need to be concerned with when processing payroll for your contingent workers.

Federal Wage and hour rules

-Overtime

FLSA (Fair Labor Standards Act)

-This is a federal law that governs excessive overtime and/or penalties

State specific rules

-California Meal Penalty

-State Specific Overtime

-NY Wage Form

I-9 compliance

-Viewing identification

-3 Day Rule

-E-Verify regulations

W-2 processing

Workers’ compensation misclassification (reporting and/or audit by insurance company)

Workers’ compensation claims management

Unemployment claims management (fighting claims and documenting HR related activity)

Tax remittance - EDD

Tax remittance IRS

Payroll Adjustments (if an employee changes withholdings, is paid incorrectly, or changes name etc…)

ERISA – Employee Retirement Income Security Act

EEOC – Equal Employment Opportunity Commission

-Reporting

-What questions can be asked pre-employment

Benefits Administration

-Vacation

-Medical Insurance

-Paid Leave

-401K

Sales Tax

-Sales tax may apply to a staffing company who supplies contingent labor depending on state and position.

Emergent screens and employs the temporary workers you recruit when your company cannot or does not want to. Emergent takes care of employer obligations such as HR, legal, payroll, workers’ comp and risk management so you can focus on your core business. Call us at 855-250-5000 or email us at info@emergent.com to ensure a compliant workforce

Seniors and The Contingent Workforce

2012-03-19T14:54:00Z

It’s been widely reported that the contingent workforce is growing at a steady rate. The U.S. Bureau of Labor Statistics shows that the temporary services industry added almost half million workers and accounted for 91% of total job growth between June 2009 – June 2011. But what does this growth mean for our ageing workforce here in the U.S.?

Between 2010 and 2030, the number of Americans between 25 and 64 will climb by 16 million and two-thirds of the increase will consist of people aged between 55 and 64.

The U.S. Department of Labor predicts substantial increases in the labor force participation rates of the 55 and older population and anticipates that about half of worker’s approaching 65-70 year-olds will work.

This will come as no surprise to the so-called Baby Boomer generation. With the majority of their working lives blighted by multiple recessions and shrinking pension funds, Department of Labor Poll Data indicates that most Boomers actually expect to work beyond the age of 65.

Of course, being faced with a smaller nest-egg than anticipated is not the only reason that older workers want to continue working. Baby Boomers are re-defining old age, and many of them who have worked hard to build a good professional reputation are reluctant to give it up entirely. They are also keen to share their knowledge with younger leaders.

A Gallup Poll suggested that 8 in 10 American workers think they will continue working full or part time after they reach retirement age and 44% say they will do so because they "want to" rather than because they "will have to." Overall, most workers expect to work part time after retirement age (63%), rather than working full time or stop working altogether.

Of course, this is excellent new for employers. By 2015, one in five workers will be 55 or older, which would result in a critical shortage of qualified workers if everybody retired at 65. In fact, engaging older workers part-time or on a contingent basis has many benefits for the employer as well as the worker.

The worker gets the opportunity to supplement their pension with an additional income, greater work/life balance flexibility and the chance to contribute their wealth of skills and experience to their chosen organization. On the other hand, Employers get additional, highly-skilled and experienced help as well as the valuable opportunity to transfer knowledge from workers who are retiring, to their Gen X and Y successors at a reasonable cost.

Bringing back retirees and other company alumni as consultants is normally much more cost effective than hiring in new, external agency help.

Looking to lower the cost of hiring back retirees as contractors? Talk to us about how we can reduce the cost of engaging project-based workers and contractors by employing your company alumni on a contingent basis.

How to Pick the Right Temporary Staffing Agency

2012-03-19T14:54:00Z

Temporary staffing services provide flexible staffing for as long as you need them, whether it’s for a few weeks, a few months or on a temp-to-hire basis.

The growth of the Contingent Workforce has led to a higher proportion of highly-skilled temporary workers than in the past, which, in turn has led to the creation of many different types of specialist staffing agencies focusing on providing contingent workers for specific skill sets such as finance, medical, engineering and legal to name just a few.

There are thousands of staffing firms in the U.S, ranging from small family-run businesses to large multi-national companies. Lots of companies prefer to work with smaller operations because of their in-depth local knowledge and lower bill rates, but it is your duty to make sure they are a reputable organization and a compliant employer for the temporary workers you wish to engage. Here are some things to think about when you shop around for staffing suppliers:

Things to Ask

How long has the company been in business in your area?
Have they ever declared bankruptcy?
Do they have any customer references they can provide?
Do they fund payroll in advance? If so, can they prove they are able to do so?
Do they withhold the proper Federal and State taxes?
What is their turnover of staff?
How are their workers screened?
Are they skills tested?
Do they have the correct Worker’s Compensation and Professional Liability insurance?
Do they have Unemployment and EPLI insurance?
Do they provide temporary worker’s with access to personal health benefits?

Notice

How are YOU treated as a potential customer? This can be very telling about the level of service you are likely to receive as a client.

Make EXTRA sure

Co-employment risks are mitigated as much as possible.
Temporary workers are not classified as 1099 contractors inappropriately.
Their Worker’s Compensation Insurance is of the correct level for the type of work performed.

The IRS Independent Contractor Amnesty Program

2012-03-12T14:54:00Z

The Cost of Misclassification

A 2009 government report found that independent contractor misclassification in 2006 cost the government $2.72 billion in unpaid federal taxes, plus the unpaid assessments for state workers' compensation and unemployment insurance programs. Recently, the Federal government decided to take steps to rectify this, announcing an independent contractor misclassification crackdown costing upwards of $46 million dollars this year alone.

What is the Difference Between a Contractor and an Employee?

Unfortunately, the definitions of what makes a worker an independent contractor as opposed to an employee are somewhat unclear, so many companies – particularly small businesses that don’t have a lot of HR and Legal support – misclassify workers accidentally. However, simply put, if the employer controls when, where, and how a worker performs his job, then he is generally considered an employee, whereas, if the worker controls when, where, and how they perform their job, they are considered to be an independent contractor.

The Independent Contractor Amnesty Program

Many companies that make mistakes have good intentions, so thankfully, the IRS introduced a measure to help companies to become compliant. The IRS Voluntary Classification Settlement Program offers protection for employers who voluntarily come forward to reclassify their independent contractors. Companies will pay just 10% of the taxes due for the year, won’t incur any interest or penalties and will be exempt from an IRS classification audit for previous six years. However, by taking advantage of the amnesty, companies agree to extend the amount of time they could be eligible for payroll audits (six years as opposed to three).

Will the IRS Tell Other Government Agencies?

Since the Voluntary Classification Settlement Program isn’t an audit program, the information won’t be shared with social security or state agencies so participation in the program won’t trigger audits from other agencies. However, many States are starting to propose their own misclassification amnesties to run alongside the federal program, so it’s worth checking to see if your State has a program that can help you become compliant at State level as well as Federally.

Who is Eligible?

Unfortunately, if your company is already under investigation by the IRS or the Department of Labor you may not take advantage of the amnesty offer. However, if you are not currently under examination then you’re eligible for the amnesty providing you have satisfied any 1099 requirements for the workers for the past three years for the workers in question and have been consistent in treating the workers as non-employees.

Consequences of Noncompliance

If your company is found to be in breach of the rules, penalties include back taxes, PLUS interest AND a fine of up to 35% of the total. These penalties can easily stretch into millions of dollars. Defending these cases can take years and also absorb thousands of dollars and a lot of man hours to make the case. However, even the IRS amnesty can’t protect you from getting sued by your contractors for unemployment insurance, disability payments, workers compensation, employee benefits, stock options, profit sharing, and retirement benefits by claiming they were effectually employees.

Next Steps

1.) Identify and review IC relationships for compliance with Department of Labor, Inland Revenue and State Standards.

2.) Appraise potential misclassification liability and financial consequences for your company – both in the short term and long term.

3.) Undertake advice as to whether the amnesty program is right for your company.

4.) Make sure that your contractors are compliantly employed going forward. Talk to us if you need additional help or advice.

US Labor Department and State of California Sign Agreement to Reduce Misclassification of Employees as Independent Contractors

2012-02-27T14:54:00Z

U.S. Department of Labor's Wage and Hour Division and State of California recently entered into a new agreement to reduce independent contractor misclassification, aiming to protect the rights of employees and level the playing field for responsible employers by reducing the practice of independent contractor misclassification. California is the 12th state to enter into such an agreement.

“We are standing together with the state of California to end the practice of misclassifying employees," said Nancy J. Leppink, deputy administrator of the U.S Department of Labor’s Wage and Hour Division. "This is an important step toward making sure that the American dream is still available for workers and responsible employers alike."

Employee misclassification is a growing problem. In 2011, the Wage and Hour Division collected more than $5 million in back wages for minimum wage and overtime violations under the Fair Labor Standards Act that resulted from employees being misclassified as independent contractors or otherwise not treated as employees.

The misclassification of employees as something else, such as independent contractors, presents a serious issue, as these employees often are denied access to benefits and protection — such as family and medical leave, overtime compensation, minimum wage pay and Unemployment Insurance — to which they may be entitled.

In addition, misclassification can create economic pressure for law-abiding business owners, who often struggle to compete with those who are skirting the law. Employee misclassification also generates substantial losses for state Unemployment Insurance and workers' compensation funds.

Effective January 2012, California's Labor and Workforce Development Agency was given the power to hand out civil penalties of between $5,000 and $15,000 for each misclassified employee in addition to those civil penalties already permitted by law. The civil penalties increase to $10,000 and $25,000 for each violation if the Agency determines that the employer has engaged in a pattern, or practice, of willful misclassification of its employees as independent contractors.

However, that’s not the end of the financial liability of misclassification. In addition to any fines or penalties assessed by either the IRS or a state agency, the misclassified employee can seek up to three years worth of unpaid wages (including overtime and meal and rest break violations) and penalties for violating the California Labor Code. In addition to this, if the misclassified worker was injured during the time with the company, the business owner could face liability for not securing the proper worker’s compensation insurance.

The line between what constitutes a worker being an independent contractor versus an employee and many companies fall foul of the law accidentally. If you’re unsure if your contractors would be better classified as employees, you can take the IRS 20 point test here or give us a call and ask at 855 250 5000.

Staffing Company Best Practices For Employing Contingent Workers

2012-02-14T14:54:00Z

To minimize contingent workforce risks, the temporary staffing company needs to behave like the employer of the contingent worker – which means going over and above simply payrolling the worker. Here’s a list of measures you might wish to consider to protect both your company and your clients:

Have employees fill out your staffing company’s employment application form, not your client’s application form.
All of your contingent workers must complete the I-9: Employment Eligibility Verification form
Your company should undertake full criminal background and reference checks
Ensure your employees to fill out a W-4: Employee Withholding form
Check that they are covered by the correct Worker’s Compensation Coverage
Retain responsibility for HR issues such as hiring, tardiness, absenteeism and performance issues
Give them an Employee Handbook and make sure they sign an acknowledgement of receipt form to say they have received it
If the employee receives any benefits, they should be given in the staffing firm's name.
Pay stubs should identify the staffing firm, not the client, as the employer.
Ask that client firms include assigned employees in the client company's internal employee e-mail distribution groups, employee rosters, or mailing lists
Give all statutorily-required notices for unemployment insurance purposes
Report wages and pay unemployment insurance and other payroll taxes to the State and the IRS
Give reminders of who the employer is throughout the employment relationship and at the conclusion of the assignment.

Sound like a lot of work? That’s because it is! Let us handle the employer responsibilities while you focus on finding quality candidates and growing your business.

Emergent has an extensive team of legal, insurance, risk management, human resources and finance professionals experienced in dealing with contingent workers.

Emergent is part of a family of companies that is one of the nation’s largest employers of contingent workers, trusted by Fortune 500 companies and small businesses alike.

Ask us about employing your contingent workers today at info@emergent.com or 855 250 5000

Three Common Challenges Faced By Staffing Companies & How To Solve Them

2012-02-03T14:54:00Z

Back in the fall, Emergent attended and exhibited at the ASA Staffing World conference in New Orleans. It was a pleasure to meet with so many staffing industry owners and executives face to face.

We found that while many of the business leaders we met came from different states and worked in different industries, they seemed to face many of the same challenges.

Here are the top three challenges that we heard about from small to mid-sized staffing companies and independent recruiters that affect both their business and their ability to compliantly provide workers to clients:

Not being able to help existing clients recruit contingent workers outside of their home state(s).

Problem: Many staffing companies we spoke with would like to service and provide workers to their existing clients in new states however, because of difficult to navigate regulations, many turn down these opportunities. This often means they lose the opportunity to competitors.

Solution: Emergent is able to employ workers in all 50 states. By working with Emergent, small to mid-sized staffing companies can meet the demands of their clients and grow their business. Additionally, client companies who value their existing recruiting relationships can engage Emergent to employ the workers these companies recruit nationwide.

Becoming overwhelmed by administrative tasks at the expense of other core tasks.

Problem: Many smaller staffing companies shared that they are bogged down with administrative obligations and find that they don’t have as much time to focus on sales and recruiting, nor to keep up on changing employment regulations and laws.

Solution: Emergent employs the contingent workers your company recruits. This means that we handle the administrative tasks associated with employing that worker; including HR, worker’s comp, payrolling, legal and state/federal tax withholding. This allows our clients to focus on their core business and tasks.

Recruiters wanting to start or expand their business, but are frustrated by lack of resources including funding, insurance, and legal expertise.

Problem: Many of the successful recruiters we met with, who had worked for large and small staffing companies alike, have had ambitions to start their own business. Others, whom we met, were already working for themselves and have built a business with several million dollars in payroll. Many had problems securing payroll funding, insurance and other operational necessities that would enable them to grow their business.

Solution: Emergent works with independent recruiters and seasoned staffing professionals who want to start their own business or grow their existing business. Emergent enables these companies to grow, secure in the knowledge that the workers they recruit will be engaged compliantly and cost-effectively.

If you, your company, or your staffing suppliers face these challenges, Emergent can ensure workers are employed compliantly and cost-effectively. Call us at 855.250.5000 or e-mail us at info@emergent.com.

Worker's Compensation and Contingent Workers - Are You REALLY Covered?

2012-02-03T14:54:00Z

As U.S. employers know, workers’ compensation insurance is a requirement that can be a large expense for any business. When exploring ways to manage this and other rising employer costs, companies must ensure that the solutions they choose do not leave them exposed to unwanted liability.

Increasingly, staffing companies and their clients are finding themselves involved in lawsuits due to the use of cost-effective, yet tenuous arrangements with third party employers of their temporary and project-based contingent workers.

There have been several legal cases filed over the past couple of weeks that raise questions as to who is ultimately liable when a third party employs temporary workers recruited by staffing companies.

This week, the Texas Supreme Court held that, under Texas law, an employer's workers' compensation policy cannot cover some employees but not others – meaning that temporary workers must be covered by the worker’s compensation insurance of the client if a co-employment status exists between the client, the staffing company and the employee.

In another case, the State of California ordered the California Self-Insurers’ Security Fund to assume workers’ compensation liabilities for hundreds of injured California temporary workers.

The workers were employed by a third party that became insolvent and thus defaulted on its legal obligations to pay the injured workers. Part of the third party employer’s business model included selling its self-insurance coverage directly to staffing companies who in turn contracted with, and delivered temporary staffing services to their clients.

Unsurprisingly, the Fund began a lawsuit to recoup its losses from the insolvent third party employer. However, they ALSO brought a lawsuit against the third party’s clients (including the staffing companies and THEIR clients) – alleging that the companies that acquired insurance from the third party did so in an attempt to avoid their statutory obligation to purchase workers’ compensation insurance for their employees.

The Fund also claims that the third party was a co-employer of the injured workers, due to the fact that their clients (the staffing companies and their clients) actually directed the workers on a day to day basis. Because of this, the California Labor Code and common law considers the companies involved as joint employers of the injured workers - despite the agreement those companies had with the third party.

Although the companies involved probably entered into the arrangement with the third party in good faith, the case is a reminder of the obvious – staffing companies must ensure that they or a third party employer of the workers they recruit is financially stable and that they are employing the workers in compliance with the Labor Code and common law.

Additionally, client companies need to be proactive and become familiar with their staffing vendor’s employment status and compliance practices - they should know if their staffing vendors are utilizing third party employers. Regardless of negotiated agreements between these companies, including third party employers, all may be responsible.

Emergent’s family of companies have been in business for more than thirty years servicing the Fortune 500 and small businesses alike. Emergent is committed to compliantly and cost-effectively employing temporary and project-based workers recruited by staffing and client companies.

To find out how we can help your business lower its costs, call us today at 855.250.5000.

Temporary and Contract Hiring to Increase in 2012

2012-01-13T14:54:00Z

Happy New Year!

January is typically a time when companies look back at the previous year and try to predict what may happen next. Despite the seemingly ever-changing economic outlook, 2012 is no different.

A new CareerBuilder survey released last week found that 35% of U.S. companies are operating with smaller staffs than before the recession and that many are turning to temporary workers to take up the slack.

They found that 36% of businesses will engage contract or temporary contingent labor in 2012, up from 34% for 2011, 30% for 2010, and 28% for 2009. Areas of high demand for this workforce include health care, information technology, clerical, and managerial.

Another survey by Staffing Industry Analysts, found that current buyers of contingent labor plan to increase their use of contingent workers by 26% over the next two years.

40% of buyers in the finance/insurance industries and 42% of restaurant/hospitality buyers are among those planning a significant increase in their contingent staff over this time frame.

The two surveys indicate that the growth predicted in the contingent workforce in recent years is coming to pass. Because of this, companies must get better at defining cost-effective and compliant contingent workforce strategies.

Although this workforce is expanding, through a webinar we did in conjunction with HR.com last year, we found that 64% of companies did not provide their staff with thorough guidance on how to properly engage contingent workers. This leaves their companies open to a variety of potentially costly lawsuits.

If you’d like guidance on the best practices and cutting edge methods for engaging (or supplying) a contingent workforce, please give me a call or send me an email today.

The Emergent team looks forward to helping you grow your contingent workforce compliantly and cost-effectively in 2012.

Best wishes,

Bill Inman

Reinventing the Job Board to Streamline Hiring

2012-01-11T14:54:00Z

Many recruiters and staffing firms have taken issue with job boards, and with good reason. Paid boards are costly, the number of job boards time-consuming, and the increasingly large applicant pool can be overwhelming. Still, job boards aren’t dead. They just need to be revived.

The Problem With Yesterday’s Job Boards

For starters, the sheer number of job boards can be overwhelming. There are dozens of highly trafficked general job boards and hundreds of popular niche boards. Recruiters who post jobs to only one or two boards run the risk of missing the best candidates, yet those who utilize every relevant board may spend an entire day creating user accounts and posting jobs.

The latter group faces additional obstacles when they start receiving candidates, as they will need to bounce back and forth from job board to job board, logging in, reviewing resumes, and trying to remember who they found on which board.

Then there is the issue of candidate overload, a commonplace for recruiters using even one mainstream job board.

With unemployment hovering around 9 percent, the average employment ad receives a record number of applicants. The ease of applying online only exacerbates the problem, with some desperate or non-strategic job seekers applying to hundreds of jobs per day. What do they have to lose, after all, aside from the few seconds it takes to click on a job ad and hit “Apply Now”?

A Solution to Yesterday’s Job Boards

Recognizing the problems associated with traditional job boards, sites such as ziprecruiter.com that distribute job postings to multiple job boards and provide tools for fast candidate screening have proven to be an effective and affordable alternative for small businesses.

These kinds of sites have had an overwhelming interest from recruiters and staffing firms, because they provide a centralized location for rapid job distribution, candidate screening, and candidate tracking – making for efficient and effective recruiting.

To minimize the time it takes to post jobs across the web, ZipRecuiter automatically distributes each job listing to over 20 broad and niche job boards. All applicants are then aggregated in one location.

To screen candidates, recruiters may opt to include a customizable online interview, which is essentially a mini-quiz that allows for various types of questions.

Other key features of ZipRecruiter include free recruiter websites, a searchable resume database, team collaboration from a single account, and one-click social recruiting.

To welcome you to the job board revival, ZipRecruiter is providing Emergent blog readers with a 30-day free trial of unlimited job posting. Click here to start your free trial today.

The Art of Following Up

2011-11-01T14:54:00Z

In the staffing business, 80% of success is just following up and this is the area is which so many sales people and recruiters fall flat on their faces. It’s no wonder that most candidates or hiring managers hold so few allegiances to any particular recruiter or remember to call a specific sales person when they have an opening.

We badger a candidate when we feel we can sell their skill set to a client, want a referral or to persuade them into going for an interview on a Friday afternoon at 4:00 pm across town. Then, after they’ve dutifully provided us with what we need from them, they don’t hear from us again for weeks or maybe months on end!

Sales people spend hours and hours on the phone “dialing for dollars” repeating a variation of the following; “Hi my name is so-and-so, and I want to place someone in your account so I can make money, do you want anybody? No, well thank you, you won’t hear from us again until I turn your account over to the new guy and he repeats the process”.

It’s no secret why so many clients and candidates treat us like a commodity; it’s because we treat them like a commodity. Staffing companies must personalize their approach for their clients and candidates – which doesn’t mean that we should just throw them on an e-mail list and send them a thinly veiled advertisement every week.

If we are going to foster relationships, get referrals and be perceived as valued partner, we need to regularly reach out to our stakeholders in a more personal manner.

A common objection to this is “I speak to hundreds of people every week, I don’t have the time to touch everyone personally, let alone often” the secret is you don’t have to touch everyone, but those you DO reach out to, you need to reach out regularly and ensure your communication adds value.

This is where the art of following up comes into play. When you engage a candidate or potential client, determine that person fits into your core target demographic and add them to your “gold sheet”. The gold sheet is made up of the top 25-50 companies, candidates and managers that you want to work with and who will eventually make up your personal “Eco System”. These are people you must form a good relationship with to be successful.

This list should contain no more than fifty people (any more is unmanageable). Gold Sheet Members should take up 50-75% your effort and time. Remember the 80/20 rule? Track their interest and personal information in your CRM and reach out to these people with a phone call and email of interest every month and personal note every two months. This will equate to 2 ½ touches per month, not too much to be intrusive, but enough to be consistent. Set it up in your CRM so that you are doing no more than 10-15 touches per week - that way the task is not overwhelming and you can personalize each one.

An email of interest is a piece of content you have come across that you can forward to your gold sheet member that would be of interest to them. Twitter, TED.com videos and The Harvard Business Review are great sources of content. Accompany with a note like ”thought you might find this interesting” or “came across this and it made me think of you”.

Phone calls and personal handwritten notes don’t have to be anything more than something like “nothing urgent, I just wanted to let you know I was thinking of you. Wishing you and your family a wonderful Thanksgiving, let me know if I can help you in anyway”.

After the fourth or fifth touch, you will begin to see a huge change in the way you are perceived. You will stand out because you actually reached out when you didn’t want anything – which makes it much easier to approach them when you do.

It takes a little time and effort to organize, but it’s well worth the effort for those on the “gold sheet”. However, if you really want to stand out from the crowd, return every call you get, gold sheet member or not. Just think how you feel when someone doesn’t return your phone call. And remember, today’s junior account manager is tomorrow’s CEO!

Steve Catt is a successful entrepreneur and one of most highly regarded staffing professionals in Southern California. Steve's simple, logical approach to helping a client define the outcome they want from every job and then finding the best person to provide that outcome, in the clients environment, has made him the go to staffing partner for companies large and small for nearly twenty years. His latest project, The RiteVu, is revolutionizing the way companies identify, select and manage the contract labor.

Originally posted on October 26, 2011

Temporary Worker Misclassification Crackdown Spreads Across the U.S: Feds Announce Misclassification Alliance

2011-10-17T14:54:00Z

Government agencies have aggressively cracked down on worker misclassification in recent months; but took it an extra step further last week when they announced that the U.S. Department of Labor has entered into an agreement with the IRS and other agencies to crack down on employers that misclassify workers as independent contractors when they should be classified as employees.

The signatory states are Connecticut, Maryland, Massachusetts, Minnesota, Missouri, Utah, and Washington with other states expected to follow suit. Numerous other states, including Pennsylvania and Wisconsin, have already passed worker misclassification laws that impose severe penalties on employers who misclassify their employees in an attempt to recover billions in lost revenue.

If a worker is an employee, the employer must pay the necessary federal and state unemployment taxes AND its share of Social Security and Medicare taxes, in addition to the withholdings of the employee's share of Social Security, Medicare and Income Taxes. The employer must also incur costs related to pensions, health insurance, vacation pay, sick pay, and workers' compensation insurance. In addition to all this, employers face federal and state regulations regarding working conditions and overtime.

With all of these burdensome obligations to handle, no wonder employers try to take a shortcut by classifying temps as independent contractors. However, with the likelihood of getting caught on the rise, the financial implications of incorrectly classifying workers could be financially crippling. If your company is found to be in breach of the rules, penalties include back taxes, PLUS interest AND a fine of up to 35% of the total owed.

If you utilize or supply temporary workers on a 1099 basis, it’s worth talking to a company like Emergent (855 250 5000) who are able to handle employer obligations including payrolling, tax withholding, workers’ comp and risk management on your behalf.

Unfortunately, the economic downturn has increased pressure on staffing firms and their clients to classifying temporary or contract workers as independent contractors to lower their costs and/or provide a better rate to their clients. Staffing firms tempted to do so are well-advised to first make sure they are complying with federal and state law as well as the IRS 20 Factor test. The majority of workers assigned through a staffing arrangement perform their work under the supervision and control of either the staffing firm or the client, and the assignment usually takes place at the client’s offices –a good indicator that the worker should be classified as an employee rather than a contractor.

Worker misclassification also can lead to other serious issues such as work authorization, overtime pay, benefits eligibility, workers' compensation insurance, state unemployment insurance taxes, and violation of state worker misclassification laws. The entire process can be costly and extremely onerous for businesses. To be safe rather than sorry, contact Emergent today on 855 250 5000 or info@emergent.com.

For additional information on proper classification of workers, see the new 12th edition of the ASA book Employment Law for Staffing Professionals.

Originally posted on September 23, 2011

Working with PEOs: Do you know the risks?

2011-10-17T14:54:00Z

PEO’s (Professional Employer Organizations) comprise a nearly $10 billion industry in the United States. These companies provide valuable services to clients who want to leverage a 3^rd party employer to handle the statutory employer responsibilities as a co-employer of their workers.

PEOs essentially hire their clients’ workers, thereby becoming their employer of record for tax and insurance purposes, charging a service fee (usually between 4 – 12% of payroll) in return for taking over the payrolling and HR functions of the workers performing services for their clients.

In recent years many staffing companies have looked to PEOs to help employ the workers they recruit who perform services at client sites. This relationship is a bit more complex that a direct one between a PEO and a client company because there may be three employers rather than two – the staffing company, the client company, and the PEO.

Some staffing companies are attracted to using PEOs because they be able to leverage the PEO’s workers’ compensation coverage at a much lower rate than their company could obtain directly through a broker or through State insurance. However, many staffing companies that use PEOs are unaware of the risks involved in using these resources to lower workers’ compensation costs.

Problems occur when staffing companies attempt to obtain a lower worker’s compensation rate by “piggybacking” off of another PEOs insurance policy. In California piggybacking was barred in 2003, but some staffing companies and PEOs do not understand the complexities of this type of engagement which may be primarily based on saving on workers’ compensation insurance.

Recently, California’s State Compensation Insurance Fund (SCIF) won a case that found a staffing company and a PEO in violation of subverting payment of millions of dollars worth of worker’s compensation premiums.

According to sources close to the case, the damages and penalties could end up costing upward of $300 million dollars – due in part, to Code Section 756 which says an employer is liable for 10 times the amount of premium it avoided paying due to its fraudulent actions.

Because of the potentially ruinous penalties, consult your legal counsel if you are considering engaging a PEO to make sure that the arrangement you undertake is in compliance with federal and state law and that the PEO has a proper arrangement with their insurance carrier. The rules and regulations for employing contingent workers can be complex and it can be easy to fall into non-compliance of them.

Emergent is a trusted employer of temporary and project-based contingent workers throughout the U.S. Our family of companies services are utilized by Fortune 500 companies and small businesses alike. Emergent is not a PEO, we screen and employ the workers staffing companies recruit, looking after employer obligations such as HR, Legal, Risk Management, Payrolling and Worker’s Compensation.

To find out more about how Emergent can help your business today call us at (855) 850-5000 or e-mail us at info@emergent.com.

Originally posted on August 30, 2011

The Difference Between a Recruiter and a Valued Staffing Partner

2011-10-17T14:54:00Z

Written by Guest Blogger - Steve Catt

Any good recruiter knows that the key to finding the right contractor for a client is having the opportunity to talk directly with the hiring manager; gathering information that will give his or her company a competitive advantage while using the opportunity to build rapport and creditability with the client. Yet, the vast majority of recruiters who get this opportunity squander their advantage by asking the wrong questions and by taking the wrong kind of job order.

The problem is that recruiters and hiring managers are trained to think of contractor requirements in terms of years of experience, education, duties, task and responsibilities etc. and not in terms of the specific desired outcome they want to temporary resource to provide. When a company hires a contractor, they bring that contractor in to do something that provides a desired outcome. If the client did not need that outcome, why would they need a contractor in the first place?

But what questions do we ask? Mostly, they are questions that give us no insight into what the client really needs, such as how many years of experience the contractor should have, whether or not the contractor has an MBA etc. But what does it really matter if someone has 8 or 10 years of experience as opposed to 6 or 12 years of experience?!

If you want a real advantage in your search, differentiate yourself from the competition and add real value- start by asking the hiring manager these four key questions:

What is the desired outcome you want the contractor to provide?
Who is the contractor providing the outcome for and what are their expectations?
What happens if the outcome isn’t accomplished by that date it’s required?
How are you going to quantify that the engagement was successful and that the contractor did a great job?

Once you have the answers to these questions, you have changed the game and you will have a huge leg up on finding exactly the right person to solve your client’s needs. Why? Because you know what the problem is because you took the time to learn the outcome the client wants the contractor to provide!

Now when all the rest of recruiters are asking candidates questions like “Do you have 5-7 years Oracle or or “on a scale of 1-10, how would you rate your Excel skills?” You are asking your candidates questions such as:

“My client needs a person who can provide this specific outcome, for this type of stakeholder who expects that the following needs to be done within this timeframe or this bad thing will happen and this is how they will quantify success”. Please describe where you have you provided a similar outcome and how would you go about providing the outcome in this instance?”

You will quickly ascertain the players from the pretenders. Also, both your candidates and clients will see you as a partner rather than just another recruiter.

In future, when you present your candidates based on the outcomes they provided and/or can provide in the future, rather than on nebulous skills and education, you sell value as opposed to individuals.

Remember, to become to client’s desired recruiter you need to concentrate on the desired outcome….

Find Steve Catt on LinkedIn at http://www.linkedin.com/in/stevecatt or at www.theritevu.com

Originally posted on August 29, 2011

Legal Issues That Could Cause Trouble For Your Staffing Business

2011-10-17T14:54:00Z

As anyone who has been in the staffing industry for any length of time knows, the rules and regulations surrounding the industry are complex and change frequently. As well as federal laws, each State has unique employment rules and regulations that make it challenging for staffing companies with limited resources to work across multiple states. Staffing companies that operate in California, New York and Massachusetts in particular, can have their work cut out trying to accommodate the unique rules and regulations of those States.

Some staffing companies provide solid, compliant solutions for Clients companies where reducing co-employments risks are important, However, the level of employer compliance when employing temporary workers, varies widely from company to company.

Some smaller to mid-sized staffing companies and independent recruiters engage the services of companies like Emergent (www.emergent.com) to serve as the employer of the workers they recruit helping them provide cost-effective, compliant and lower risk staffing solutions for the temporary workers they supply to Clients.

Some small to medium size staffing companies attempt to manage back office functions, insurance, payroll funding, and risk management with limited resourcse. Others, often unbenownced to their clients straddle potential misclassification issues by delivering workers on 1099s even though the Client is directing their work on a day-to-day basis. With these scenarios in mind, here are just some of the key issues that staffing companies need to look out for.

Discrimination and Background Checks

Discrimination complaints filed with the Equal Employment Opportunity Commission can lead to expensive litigation and costly settlements for a staffing company. In some cases, staffing companies are leveraged by clients as a way to outsource tests or screening functions that may create EEOC issues for them. However, staffing companies must resist pressure from their clients to apply any potentially unlawful or high-risk methodologies which may include screening.

Becoming more popular is the use of publically available social networks and websites to screen candidates, however that can land staffing companies in trouble. Employers may be accused of overlooking the online profiles of people based on prohibited criteria such as race, creed, color, nationality, sex, religious affiliation, marital status, or their medical condition.

Immigration Issues

If your staffing company is placing a foreign national, the staffing firm must address government immigration requirements carefully, because even unintentional violations can have costly repercussions. When starting a job, employees AND contractors are required to prove that they are legally entitled to work in the United States and the staffing company must only accept original documents. Employers must verify the identity and eligibility to work for all new employees. An I-9 form must be completed and kept on file by the employer.

SUTA Dumping

SUTA dumping is a practice sometimes used by companies doing business in the U.S. to circumvent paying unemployment insurance taxes that may have been increased because of previous experience employing workers with a large number of unemployment claims. If an employer’s payroll is subject to a high unemployment insurance tax rate, the employer sometimes tries to reduce that rate by shifting its payroll to an entity with a lower unemployment insurance tax rate. Some companies get multiple account numbers with a state unemployment insurance agency, and shuffle employees around to the account number with the lowest unemployment insurance rate each year. Another tactic is to buy a business with a lower unemployment insurance rate and shuffle employees to that other business to pay the lower tax rate. The federal government addressed the issue in 2004, but the practice still occurs – even though it’s highly scrutinized.

Worker Misclassification

State unemployment insurance reserves have fallen due to the recession which is one reason worker misclassification has become a high priority for government agencies. The IRS has clamped down on Independent Contractor Misclassification, allocating $25 million dollars to indentify misclassified employees.

Many staffing companies engage temporary workers on a 1099 basis because it’s the easiest and ‘cheapest’ way to engage temporary and project-based contingent staff. However, 46% of temporary workers classified as 1099 contractors are found by the IRS to be misclassified. Also, as many as one in three companies fail their worker classification audits.

Staffing companies sometimes face complex compliance issues related to worker classification, and the risks associated with misclassification have increased dramatically – when a company is found to be in breach of the rules, penalties include back taxes, PLUS interest AND a fine of up to 35% of the total. These penalties can easily stretch into millions of dollars. Defending these cases can take years and also absorb thousands of dollars and a hours.

No hard and fast definition of what differentiates an independent contractor from an employee exists but the IRS 20 point test is a good barometer, included on our article on 1099 misclassification. If independent contractors do not meet one or more of these criteria, they may be more appropriately classified as W-2 employees.

Worker classification audits can be triggered in many ways. An independent contractor might file an application for unemployment benefits or fail to properly report income taxes. Workers might also challenge their own classification if other employees in similar positions received higher compensation or better benefits. The IRS has provided the SS-8 form for workers to submit directly to the agency who are not sure if they are classified properly. Staffing companies and independent recruiters must classify workers correctly to protect themselves and their clients from the risk – although many staffing companies feel pricing pressure the urge to deliver 1099 workers who should be properly classified as W-2 workers should be resisted.

Wage and Hour Regulations

Companies may pressure staffing firms to classify workers as exempt from overtime pay. Staffing firms must resist this pressure as the staffing company – as well as the client - may be liable for the violations. See our article for more information on wage and hour laws in California.

Emergent reduces the cost and risk of supplying temporary and project-based workers to Clients. Emergent is one of the largest employers of contingent labor in the United States and handles employer obligations such as payroll, tax remittance, human resource management, invoicing, accounts receivable, and workers' compensation insurance at a significantly lower cost. Call (855) 250-5000 or email info@emergent.com to speak with a representative about how we can help your today. More information is available atwww.emergent.com

Originally posted on August 16, 2011

The California Labor Code and Workers’ Compensation

2011-10-17T14:54:00Z

California law requires all employers to carry workers' compensation Insurance. Workers' compensation provides injured workers with medical care, disability, vocational retraining, and other benefits. Workers' compensation is the "exclusive remedy" and Workers are protected by this coverage, giving up their right to any other remedy for workplace injury.

Every staffing company that supplies and every company that utilizes contingent workers in California should be familiar with the California Labor Code. This blog provides information on some of the key sections of the Code with regards to workers’ compensation coverage, which applies to all W-2 contingent workers as well as internal staff.

If you are employing or utilizing contingent workers in California understanding these key sections of the Labor Code in concert with co-employer risks is important for any well run contingent workforce program.

Working with Staffing Companies Who Provide Workers’ Compensation Insurance to Workers as Part of Their Service (Section 3602)

A client company may secure the payment of workers’ compensation on employees provided to their company by agreement with their staffing company by entering into a valid agreement with the staffing company - under which the staffing company agrees to obtain workers' compensation coverage for those employees.

If both companies enter into this agreement, both employers shall be considered to have secured the payment of workers’ compensation - provided there is a valid legal agreement between the employers to obtain the appropriate level of workers’ compensation coverage and that the coverage remains in effect for the duration of the employment provided.

Non-compliance with the above could result in civil or criminal penalties for failure to provide workers' compensation coverage or legal liability in the event of an employee injury.

Every California Employer Must Secure Payment of Compensation in One of the Following Ways (Section 3700)

A.) By being insured against liability to pay compensation by one or more insurers duly authorized to write compensation insurance in California.

B.) By securing a certificate of consent to self-insure either as an individual employer, or as one employer in a group of employers, by the Director of Industrial Relations. To be considered, you must give proof that you have the ability to self-insure and to pay any compensation that might arise to your employees.

Consequences of Failing to Secure the Payment of Compensation (Section 3700.5, Section 3706, Section 3707, Section 3708 )

The failure to secure the payment of compensation is a misdemeanor punishable by imprisonment in the county jail for up to one year, or by a fine of up to double the amount of premium, as determined by the court; or by both imprisonment and fine.

If the employer fails to secure the payment of compensation, any injured employee or his dependents may bring an action at law against the employer for damages.

If Workers’ Compensation Insurance is not provided, it is presumed by law, that the injury to the employee was a direct result of the negligence of the employer, and the burden of proof is upon the employer, to rebut the presumption of negligence.

The employer may not defend their case by arguing that the employee (or the employee’s co-workers) were guilty of contributory negligence or that the employee undertook certain risks as a necessary part of the job.

Emergent (www.emergent.com) takes care of employer obligations including Workers’ Compensation Insurance, for temporary workers. Please contact us at info@emergent.com or on 855 250 5000 for a free consultation today!

Originally posted on July 20, 2011

Workers' Compensation Basics

2011-10-17T14:54:00Z

Recent research found that many workers hired through staffing companies often have difficulty filing worker’s compensation claims. Industry advocates and commentators have suggested problems are caused by documentation deficiencies and a lack of regulations holding staffing firms responsible for their workers.

Often, the nature of temporary employment can make it difficult to discern who is responsible for providing worker’s compensation insurance for the temporary worker. Ultimately though, it is the responsibility of whichever company is the employer of the worker to make sure that their employee has the appropriate insurance.

Additionally, in many cases the client company that uses the services of the worker provided by the staffing company may be directing the worker on a daily basis. In this scenario both the client and the staffing company could be deemed co-employers of the worker where both companies could be responsible for ensuring that the worker has proper workers' compensation coverage.

Navigating Workers' Compensation Issues for Managers at Client Companies

If the client company that uses the workers services would like to directly employ the worker, as opposed to the worker being employed by the staffing company, then they may add temporary workers that they or the staffing company recruits to their existing insurance policy, In this case the client company may have a better insight to the level of risk involved with employing the worker and assign appropriate job classifications.

However, if the client company does not want to be the statutory employer for the temp workers then they may be better off engaging workers through staffing companies. In this scenario the staffing company carries the workers' compensation insurance for the workers. It is important in this scenario to ensure that the staffing company is properly insured and classifying the workers. Because of co-employment liabilities an error on the staffing company could create risks for the client company as well.

Another option to limit risk is to have a staffing company source the temporary worker and have an compliant, stable employer for the workers during their assignment. Emergent is an employer of temporary and project based labor recruited by staffing companies and client companies alike. The Emergent family of companies is one of the largest employers of temporary labor in the U.S. and has over 30 years experience. With Emergent client companies can utilize the best recruiting resources to locate temporary workers while leveraging Emergent's compliant contingent workforce employer solutions to lower risk and cost.

In any case client companies should work with their staffing company or Emergent to ensure that they have the appropriate insurance and are correctly classifying the temporary workers. They should also endeavor to see that the the temporary and project workers are working in a safe environment.

Navigating Workers' Compensation for Staffing Companies

When staffing companies employ temporary labor, they must take care that they take they assign the proper job classifications for their employees – which can be tricky if the staffing company does not have dedicated risk management and insurance resources or if they are not ensuring that their employees are performing the type of tasks outlined for the worker.

Staffing companies may gain by being diligent in tracking the assignments, the type of work being done before it is performed and the risk history of their clients and their locations. In some cases it may be prudent for the staffing company to perform a site visit at the client site to verify that the workers will be in a safe environment.

Purchasing workers compensation coverage can be challenging for temporary staffing companies as the cost of the coverage can be expensive For some higher-risk industries, insurance may be hard to obtain as well. Increasingly, many smaller staffing companies are finding it either harder to get coverage for their workers, or finding that the cost is expensive and challenging to their business model. Also, handling risk assessment and work comp claims can be time consuming, and may require additional administrative support.Working with Emergent, staffing companies are able to benefit from our economies of scale in obtaining workers comp insurance, assessing risk and handling claims.

For Staffing Companies and Client Companies

A big worker’s compensation risk for both staffing companies AND client companies is if the worker has been erroneously classified so that neither is the employer of the worker. If the temporary worker has been mis-classified on a 1099 basis both the staffing company and/or the client company could be liable.

How Emergent Can Help

Emergent’s family of companies is one of the nation’s largest employers of temporary workers. We employ the temporary workers you recruit – handling time-consuming and expensive employer’s obligation’s including worker’s compensation insurance and claims management.

We can help you lower the cost and risk of engaging the contingent worker’s you recruit. Contact us today at 855-250-5000.

Originally posted on July 12, 2011

The Rise and Risks of the Contingent Workforce

2011-10-17T14:54:00Z

Last week, Emergent was invited to host a webinar for HR.com and the Institute of Human Resources on "The Rise and Risks of the Contingent Workforce".

If you'd like to hear the webinar or receive a copy of the presentation, please click here where you will be taken to HR.com and prompted to create an account (it's quick, easy and takes just a minute) so that you can view our webinar on the HR.com site. Alternatively, you can e-mail info@emergent.com and one of our team members will send you a copy.

During the webinar, we asked the attendees to take part in a short poll and we found that co-employment, along with 1099 misclassification, were the top two concerns for companies hiring temporary workers.

Co-employment is worrying for many companies that use contingent workers as the rules can be complex, change often, and can be challenging to sort out. Co-employment occurs when the company that utilizes the contingent worker’s services (the client company) manages the workers on a day-to-day basis, becoming a co-employer or joint employer along with the staffing supplier.

Co-employment could mean that the client company may be held liable for the decisions and mistakes of the staffing supplier and vice versa. Client companies and staffing suppliers must be clear about who is the employer of the worker and what responsibilities each company has towards the worker. These can vary from state to state, so companies must make sure that they are familiar with local as well as federal laws. Remember, it is both the staffing supplier AND the client company's responsibility to familiarize themselves with the law. Don't simply rely on the other party to tell you what you need to do - they might get it wrong...

Of course, it is relatively easy for a seasoned hiring manager or staffing supplier to become familiar with the laws around employing contingent workers, and they must also make sure that line managers throughout the organization of the client company know the rules and best practice surrounding the treatment of contingent workers, should they have any under their supervision. This can often prove challenging.

We suggest that companies and staffing suppliers - after thoroughly researching best practice and obtaining legal advice - create a guide book that managers can refer to on how to properly engage contingent workers. Interestingly, when polled during our webinar, 64% of HR professionals said their companies did not issue any such guidance for hiring managers.

Another concern for our webinar attendees was the misclassification of temporary staff as independent contractors. 46% of contingent workers classified as 1099 independent contractors are found by the IRS to be misclassified and one in three companies fail their worker classification audits.

Again, the rules are complex, so we suggest taking the 20 point IRS test to carry out an assessment of your contractors. If you don't meet the required criteria, your contractors may be more appropriately classified as W2 employees. If so, you should give us a call.... Emergent employs the contingent workers your company recruits or supplies. We are part of a family of companies that is one of the largest employers of contingent labor in the U.S. - trusted by many Fortune 500 companies to employ their contingent workforce.

Talk to us today to find out how we can help you manager your contingent workforce, maximize your profit and minimize your risk. Call us on 855 250 5000.

Originally posted on June 14, 2011

For Staffing Companies: Temporary Staffing Sales are Booming, Here is How to Present Your Services to Clients

2011-10-17T14:54:00Z

Earlier this week, the American Staffing Association reported that contingent workforce sales totaled $87.4 billion in 2010 – that’s 21.3% more than in 2009. With figures like that, it’s no wonder more and more staffing companies and independent recruiters are looking to increase their contingent workforce services to clients. However, staffing companies and independent recruiters, who would like to ride the contingent workforce wave, may be wondering how to communicate the value of these services effectively to clients. Here are a couple of tips:

IF THE SUPPLY TEMPORARY WORKERS AND CONTRACTORS IS A NEW SERVICE FOR YOUR COMPANY it may be effective to simply put in a call to your clients to tell them about your new service, even if you think they may not use this type of labor. If you've worked with a manager for many years, they may simply assume that you don’t recruit temporary workers because you have not done so in the past, and could be overlooking your company and passing business to other staffing companies.

IF YOU HAVE NEVER PROVIDED CONTINGENT WORKFORCE SERVICES TO A CLIENT BEFORE or you haven't asked them about it for some time don’t assume that just because some of clients have never recruited for temporary positions in the past, that they would not be interested in doing so now. Research suggests that 34% of hiring managers are looking to hire contingent workers this year AND the contingent workforce is growing at twice the rate of the permanent workforce currently – meaning that companies are demanding more temporary labor like never before.

WHEN MARKETING TO NEW CLIENTS it may make sense to suggest using temp- or contract-to-hire workers for companies who don’t have the budget for new internal headcount. Contingent workforce spend often comes out of a different cost center for clients than internal hires. This allows companies to scale up to meet their immediate needs without blowing the budget allotted for employees on the internal payroll. Mentioning that your company can offer contingent workforce services as temp- or contract-to-hire situation can help your clients – especially since lots of companies are uneasy about recruiting for a direct hire position in the current economic climate.

On the phone, clients may ask you about your new offering, here are a few questions we’ve heard asked of staffing companies we work with:

Why is your company different? Small to mid-size staffing companies and independent recruiters usually have a distinct advantage over large staffing companies -- they are experts in their niches and passionate about what they do. Usually this translates to higher quality workers delivered faster to clients than larger services. Where these companies sometime fall short is handling employer responsibilities. Large staffing companies have vast and dedicated resources for risk management, insurance, legal and finance. With Emergent staffing companies of any size gain big company resources (the Emergent family of companies is one of the largest employers of contingent labor in the U.S.)to compliment their service expertise and dedication.

Why does your company supply contingent workers?Statistics have shown that the direct hire placement business declined 50% between late 2008 and 2010! The economic environment has made it essential for companies to leverage cost effective ways of doing business. Contingent workers allow companies to easily and flexibility tap into the skills they need to execute tasks and projects for a period of time potentially saving a large amount of money over internal hires.

Why should my company use temporary workers or contractors? Many companies may have excess workload and need help immediately but cannot get approval in time for internal headcount. By engaging contingent workers clients will expediently gain the skills they need now without having to make a long-term commitment to the worker. Additionally companies that are unsure about bringing on full-time, internal workers can utilize contingent workers until they gain clarity on hiring strategy. At this point they may convert the contingent worker to direct hire.

How does your company employ contingent workers?

In general clients will want to be sure that the contingent worker your company supplies is delivered in compliance with Federal and State laws and regulations. Engaging contingent workers on a 1099 basis can be risky for both the supplier and the client if all the items in the IRS 20 Factor test are not met. By working with Emergent staffing companies recruit the workers and then Emergent handles the statutory employer responsibilities that come with engaging contingent staff on a W-2 basis, leaving you to look after sales and client services. See our blog post on 1099s and Independent Contractors: What you need to know for more information

Do you provide contingent workers for most skill types? In all States? The answer to this will depend on your companies specialties, insurance, risk management strategy, financial capacity and whether your company is set-up to employ workers in each State. For staffing companies Emergent makes it easy to do business in new States and skill areas by becoming the employer for the workers for the duration of their assignment.

What are your fees for providing contingent labor?

Generally, contingent labor pricing can be offered is offered in the following ways:

(i) with a markup rate on top of the worker’s pay rate

(ii) as a pre-negotiated bill rate

(iii) as a pre-negotiated pay rate and markup rate

(iv) as a statement of work.

See our blog post on The Basics of Staffing Markups for more information.

Call Emergent today on 818.955.6870 to find out how we can help you grow your business!

Originally posted on June 14, 2011

Wage & Hour Laws - Meal Penalties in California

2011-10-17T14:54:00Z

Federal and State Wage and Hour are important to follow for the companies that supply and use a contingent workforce. Not following or understanding these laws can lead to costly violations that can be easily avoided.

California, for example, is a State that has many Wage and Hour law considerations. If you operate a business in California or utilize California residents to perform work in other States there are several important things to consider for meal breaks.

Employees in California are entitled to an unpaid 30-minute, duty-free meal period after working for five hours and a paid 10-minute rest period per four hours of work.

California Labor Code section 226.7 prohibits employers from requiring employees to work during any mandated meal or rest period. Employers who fail to provide the mandated meal period or rest period must pay the employee one additional hour of pay at the employee's regular rate of compensation for each work day that the meal or rest period is not provided.

A minimum of thirty (30) minute meal is required every five (5) hours unless the scheduled shift ends at six (6) hours and is mutually agreed upon between client manager and worker. If meal is not received the employee is due one (1) hour of their wage as a meal penalty. Employees only receive one (1) meal penalty per day regardless of how many are incurred.

The only exceptions to the rule are when

The nature of the work objectively prevents an employee from being relived of all duty

AND

The on-duty meal break is agreed to in writing by the employee and his or her employer

AND

The employee is paid for the meal break

To ensure that your company complies with the labor law, you should:

Review meal and rest period policies for contingent workers to ensure they meet with the law

See if any positions qualify for “on-duty” meal periods and ensure that the appropriate agreements are signed

Make sure all employees read and acknowledge in writing that they understand your company’s meal and rest break policy

If a worker is not able to take their required break, you must pay the additional hour of pay they are owed

Ensure that your managers and supervisors monitor employees to make sure that they are taking their statutory breaks and mark the breaks on their timecards

Make sure you keep good records!

Originally posted on May 31,2011

The Basics of Staffing Markups

2011-10-17T14:54:00Z

The total size of contingent workforce payroll in the U.S. is expected to rise to $164 billion by 2018. The opportunity for companies to capitalize on this trend, increasing the productivity and flexibility of their workforce, has become more widely known in recent years. Additionally, companies are using contingent workers in more highly skilled roles to augment internal staff and in these roles the bill rates - hourly rates including all costs and fees charged to the client company by the staffing supplier - increases as the pay rate does.

In many cases, the companies that supply contingent labor to clients on an hourly basis use a fee model that based on a percentage of the pay rate, often referred to as a markup. This 'markup' consists of several components, including:

“Burden” (employer taxes, payroll costs, workers compensation insurance, etc.)
Recruiting personnel and expenses
Overhead (general and administrative costs)
Profit margin

The pay rate (aka hourly rate) of the worker plus the markup is called the bill rate. Markups can range from 30% to 60%+ with an average in the high thirtieth percentiles across all skill disciplines. Some staffing suppliers promote rates below 30% and, conversely, some services may charge 75% to 100%+ markups. The Burden costs vary based upon the worker’s skill specialization, the risk of the job, the State in which the worker is employed, the total volume of payroll with a client, and the payment terms. Recruiting costs and pay rates may differ from assignment to assignment, as different factors such as the availability of talent, ‘going’ market pay rates and length of assignment come into play.

For example, if a contingent worker is engaged on a three (3) month assignment (12 weeks at 40 hours or 480 total hours) the following total costs would apply relative to the pay rate of the worker and markup:

There are other ways that contingent labor is delivered to clients including fixed markup costs, statement of work or milestone based pricing, per unit or task pricing, or fixed bill rates. For the most part however contingent labor in the is delivered with a markup on pay rate. If your company is using or supplying contingent labor then it is helpful to understand how the marketplace prices these services in order to maximize profits and productivity.

Originally posted on May 27, 2011

Benefits of Temp-To-Hire

2011-10-17T14:54:00Z

Hiring a worker on a temporary basis is a great way to try out a potential new employee before extending them an offer for direct hire employment. It’s also a great way to implement a new position within a company before creating a new role.

Rather than hiring the worker as a full-time, internal employee – engage a worker can be done easily through an Employer of Record service.

During a probationary period, usually lasting from 8 to 14 weeks, the temporary employee’s performance can be evaluated and a decision on whether he or she should be hired full-time or let go can be made.

BENEFITS OF TEMP-TO-HIRE

·Extended interview period - Temp-to-hire allows a company to “get a feel” for someone over a period of time in a way that is difficult to accomplish during a short interview. For example, does the worker fit with the rest of the team? Do they have a good work ethic? Can they work under pressure?

·Engage workers quickly and easily - Temp-to-hire candidates can be engaged quickly and easily through an Employer of Record service. These services (see Emergent's website for more information) handle all statutory employer responsibilities, including background screening, on-boarding, and payroll processing during the workers assignment – enabling you to focus on your core business needs.

·No obligation to hire - If a company finds that the worker is not a good fit, they can disengage with the worker before or at the end of the contract. without having the obligation to hire them.

·Evaluate long-term hiring need - Whether a company is hiring to address recent growth or a newly created positions, temp-to-hire provides the time to ensure that the position is needed before adding to the internal headcount.

·Free to end assignment at any time - If a temp-to-hire candidate isn't a good fit, the assignment can be ended at any time. When the candidate is the employee of an employer of record service, legal exposure is minimized.

·Reduced benefits spend - Companies that use temp-to-hire workers do not incur benefits or vacation time costs during the probationary period when engaged through an Employer of Record service.

·Alternative to high recruiting costs - Temp-to-Hire and Employer of Record arrangements can offer significant cost savings versus hiring a permanent employee through traditional means.

Originally posted on May 27, 2011

Misclassified Staff at General Motors Sue Over Pay

2011-10-17T14:54:00Z

Workers at a car factory in Ohio are suing General Motors for $4 million in back pay after they claim they were wrongfully classified as temporary employees. The workers claim they were paid forty percent less than their "permanent" counterparts.

The group of workers were hired in 2006 and laid-off the following year before being brought back on board six months later. When they were re-hired, they claim that they wrongfully reclassified as temporary workers.
See News Article Here for More Information

Originally posted on May 9, 2011

Co-employment and the contingent workforce: Do you know the risks?

2011-10-17T14:54:00Z

Co-employment is a relationship between two or more employers whereby each has the legal responsibilities to the same employee.

Co-employment issues can present problems for the companies that supply contingent labor (temps, contractors, consultants, freelancers, and the like) and their clients. Often, client companies erroneously believe that the staffing company or other supplier they engaged the temp worker through is the sole employer of that worker.

However, if the client company manages that contingent worker on a day to day basis, they could be regarded as a co-employer or special employer of the worker in conjunction with the worker's statutory employer - often a staffing company or 'payrolling' company.

With co-employment, each company is liable for the decisions made by the other party. This means that if a contingent employee files a legal complaint and wins, both the supplier of the worker and the client company could be responsible for paying damages.

Co-employment risk is challenging to eliminate entirely, but there are many things you could take into consideration to reduce your risk considerably.

For the client company utilizing the contingent worker(s) services the following considerations may be observed:

Do not discuss pay rates, increases or bonuses - this is the responsibility of the worker's statutory employer. A statutory employer is generally one who is liable for workers' compensation according to a statute establishing such an employment relationship.
Do not discuss opportunities for regular full-time employment without consulting the worker's employer.
Do not request that the worker complete timecards or forms with the client company's name on them. The worker's employer is responsible for all timecards and on-boarding paperwork (such as applications).
Do not counsel assignment employees concerning: tardiness, punctuality, attendance, dress code, child-or elder-care arrangements or other personal matters.
Do not inform an assignment employee that he or she is terminated or suspended.
Refer all questions relative to pay, benefits, duration of position or opportunity for employment to the worker's employer.
Report any absences, tardiness or unacceptable behavior to the worker's employer.
Inform the worker's employer about any changes in an employee's work schedule.

Emergent can help your company considerably reduce co-employment risks when working with contingent labor.

Call us today on 855 250 5000 or e-mail info@emergent.com to find out how we can help you navigate the risks of hiring temporary labor!

Originally posted on May 6, 2011

Does Your Company Use or Supply Contingent Workers? If So, Here Are Some Considerations.

2011-10-17T14:54:00Z

Utilizing contingent workers can seem easy and seamless for your organization. Contingent workers provide some flexibility that a direct hire workforce does not. Steps to successfully utilizing a contingent worker include locating a worker, negotiating their rate, engaging them for a pre-determined length of time, and then terminating the worker's assignment when appropriate. As simple as it seems, there are many considerations when engaging or supplying contingent workers. To minimize the risk surrounding contingent workers your company may consider the following:

If engaging the worker as a 1099 independent contractor, does the assignment meet the IRS test for Independent Contractors? See the IRS Worker Status Determination form here and a detailed IRS training manual on the subject can be found here.
Whether a worker is engaged on W-2 or 1099, does your company know the standards of relevant Federal and State agencies beyond the IRS? For example, see EEOC contingent worker guidelines here. Other considerations include ERISA and HIPPA.
Are contingent workers mentioned in your Employee Handbook? Handbooks may include language excluding contingent workers from standard benefits reserved for direct hire employees.
Are your managers aware that contingent workers are covered under most of the same laws that apply to employees (including harassment, discrimination, and wage and hour laws)? For example, the State of Virginia provides many of it's managers with a guide to contingent workforce risk and can be viewed here.
If your company uses contingent labor are those workers covered under your general liability insurance policy? Don’t take it for granted that they are… Additionally, ensuring that the staffing suppliers you work with carry the proper workers' compensation, general liability, and employment practices insurance can help to limit the risk of utilizing contingent workers.

Emergent employs contingent workers you recruit, enabling your business to focus on it's core competencies. Emergent handles all employer responsibilities employment including legal, payroll, invoicing, insurance, tax, HR and workers’ comp administration for the duration of the worker's assignment.

Originally posted on April 21, 2011

Misclassification vs. “Payroll Fraud”

2011-10-17T14:54:00Z

As Federal and State agencies seek to narrow the tax gap, a new bill was recently introduced that puts independent contractor misclassification back in the forefront of the national labor and tax agenda.

Undeterred that two misclassification bills introduced in 2010 never made it out of Committee, the sponsors of the new bill are trying to drum up support by characterizing misclassification as a form of “payroll fraud.” – a term that invokes white collar criminality rather than an innocent oversight that is denoted by the word “misclassification”. It would appear that ignorance is no longer a defense in the eyes of the law….

A press release for the bill can be found here. The press release states "according to a study released in February 2009 by the Ohio Attorney General’s office, Ohio loses at least $160 million a year to each year from worker misclassification."

Should the bill pass here is what it would mean for businesses...

Penalties for misclassification, up to $5,000 per employee, which could be staggering for the companies that are knowingly or unknowingly 'misclassifying' a significant amount of workers as 1099.
It would be the one of the first federal laws where businesses must give newly hired workers a federally prescribed notice.
The law would cover independent contractors who provide services through a corporation or an LLC and not just on an individual basis.
The bill would still allow companies to continue to pay workers on a 1099 basis – provided it is an appropriate relationship.

-Explaining the purposes of the new bill one of the sponsors states that the bill would “relieve the burden on American taxpayers who foot the bill when businesses” mis-classify workers.

Read our post on 1099 misclassification for more information.

Originally posted on April 20, 2011

Social Networking Becoming More Important in Recruiting Workers

2011-10-17T14:54:00Z

Social media sites like LinkedIn and Facebook are increasingly being used by staffing professionals to recruit and hiring potential candidates.

According to a recent SHRM survey, 56% of respondents said that they currently use social networking websites to recruit workers – up from 34% in 2008.

Recruitment professionals have certainly begun to realize the importance of social media sites as a key part of their strategy. In 2008, 45% of HR professionals said they had no plans on utilizing the social media as a method of recruitment, but now, this number has fallen to 21%.

67% of respondents stated their top reason for utilizing social networking tools is due to the fact it is less expensive than other methods of recruiting job candidates, and, as research shows, the recession has only helped drive up HR costs at most companies by over 11% from 2008 to 2010.

However, while most organizations have confronted rising HR costs since 2008, world-class HR organizations have managed to reduce their costs by more than 13%. These companies now spend nearly 30% less per employee, and operate with more than 25% fewer employees than they did in 2008.

It’s no coincidence that over the same period, the contingent workforce has also shown rapid growth. Last year alone, 26% of all jobs added by the private sector were temporary positions.

Using contingent labor saves money, according to 92 percent of recently surveyed companies that use temporary workers. They attributed savings of 9 percent toward using contingent labor.

Research by the Human Capital Group indicates that one third of the U.S workforce is now comprised of contingent workers. This trend is unsurprising as Contingent Workers provide convenient, flexible, specialized skills that best fit the changing needs of the modern workplace.

Like the use of social media by recruitment professionals, the use of contingent workers looks set to go from strength to strength as companies increasingly value speed, cost savings and the flexibility that both contingent workers and social media tools provide.

Originally posted on April 20, 2011

AOL Being Challenged on Independent Contractor Misclassification and WARN act Violation

2011-10-17T14:54:00Z

Last week, AOL terminated its relationship with thousands of freelance writers they had classed as independent contractors - a move that followed shortly after their merger with the Huffington Post a few weeks ago.

Some of the writers are now claiming that they should have been treated as full-time, internal employees - which would have enabled them to have been covered by the WARN act. However, AOL claims that the WARN Act - where a company must provide 90 days notice before a mass layoff - doesn't apply to contract workers.

Even so, there are concerns that many of the freelancers AOL utilized could potentially be construed as full-time employees under the act, due to the nature of the responsibilities and full-time hours some of the freelancers worked at the company.

AOL insiders claim that AOL held a series of calls with freelancers to address their questions. Several things came up - one freelancer noted that they worked full-time hours, while another pointed out that her duties were identical to those of an AOL News staffer who was recently laid off. This is the kind of thing that could raise legal doubts about AOL’s claim that the WARN Act doesn’t apply to contract workers.

The WARN Act requires employers to provide 90 days of notice before a mass layoff, defined as a reduction in workforce by 250 jobs (or 33 percent of the total) at one site. If it’s found that some of AOL’s freelancers worked full time and/or held similar jobs/duties to full time staffers, AOL could find themselves in a challenging situation classifying the workers as freelance or contingent.

Source: Forbes.com

Originally posted on April 7, 2011

Latest Figures from Bureau of Labor: Temp jobs up by 28,800 in March

2011-10-17T14:54:00Z

The latest figures from the Bureau of Labor Statistics show the U.S. added some 216,000 new jobs in March signaling further recovery for the American economy. Overall, the U.S has seen around 1.3 million jobs added this year and the nation’s unemployment rate fell to 8.8% last month.

Here’s where hiring happened during March:

Healthcare, Leisure & Hospitality and Temporary Labor were the three industries where hiring increased significantly last month.

Government, Construction and transportation sectors remained more or less unchanged.

• Manufacturers (+17K) were hiring again in March – possibly due to events in Japan

• Temp positions (+28.8K) continued to add workers in March

• Leisure & Hospitality (+37K) was booming as consumers took the family out to eat – a first step into the spend as consumer confidence starts to eke out of its recession lows. Restaurants and bars added workers (+26.5K) like crazy last month

• Retail (+17.7K) employment was up during March.

• Financial firms (+6K) saw a slight bump in March. There was an uptick in hiring in the Real Estate (+9.5K) subsector as the volume of renting/leasing has increased.

• Health care (+36.6K) continued to add workers, significantly better than the average month (+24K) from the past year.

• Tax season has been busier than usual this year with Accounting/Bookkeeping services (+20.2K) adding workers in March

Originally posted on April 7, 2011

Two in Five Firms Use More Independent Contractors

2011-10-17T14:54:00Z

A recent survey* of HR execs found that 41% have used the services of independent contractors over the past two years. This shows that companies are starting to re-think the tactics they employ to align their workforce with their business objectives – and that they are also starting to enjoy the flexibility that hiring independent contractors provides. Contingent workers make it easy for companies to scale their workforce up or down to meet seasonal or project based demand.

However, it’s not just businesses that are initiating the change. It’s the American workforce itself. The two biggest groups of people in the U.S workforce today – the baby boomers and Generation Y – are they key drivers of the growth of the contingent workforce. Research found that 80%* of baby boomers said they planned to work as contractors past retirement. The same research also suggested that Gen Y employees are likely to change careers approximately 10 times before the age of 40 – making contract work a very attractive option for trying out new career opportunities.

All in all, it looks like the contingent workforce is set to continue to grow - and be beneficial - to companies and workers for a long while to come.

* 1.) Right Management survey

* 2.) Nielsen survey

Originally posted on April 7, 2011

1099s and Independent Contractors: What You Need to Know

2011-10-17T14:54:00Z

Contingent worker classification, for tax purposes, continues to be an important topic.The article provides some resources to help understand the factors that make a contingent worker an employee or a 1099 independent contractor.

20 Factor Independent Contractor Test

In order to understand if the contingent workers your company utilizes are classified correctly you may first consult the IRS 20 point test. This test will help to see if the independent contractors you work with meet the criteria needed for classification as independent contractors. In essence though, the more control your company exercises over how, when, where, and by whom work is performed, the more likely the workers are actually employees, not independent contractors.

A downloadable version of the 20 Factor Test can be found here.

46% of Independent Contractors Are Found to be Misclassified

Ultimately, 46% of Independent Contractors reviewed by the IRS are determined to be misclassified and one in three companies fail a worker classification audit. The IRS claims to lose nearly $350 billion a year in unpaid taxes, with $39 billion attributed to underpayments or non-payments by independent workers. Also, if your contractors are re-classified as employees, you have to provide them with the same benefits that you have available to your other employees.

Penalties for Corporations Can Be Severe

Needless to say, the IRS is keen to clamp down on this loss of revenue – last year they hired 4,500 new agents to undertake audits. If your company is found to be in breach of the rules, penalties include back taxes, PLUS interest AND a fine of up to 35% of the total. These penalties can easily stretch into millions of dollars. Defending these cases can take years and also absorb thousands of dollars and a lot of man hours to make the case.

It’s not just smaller companies that have made mistakes, the rules are complex, making big companies equally as fallible as smaller businesses. For example, FedEx was found to owe approximately $319 million in back taxes over worker misclassification issues and Microsoft were famously held responsible for the non-payment of employment taxes by workers inappropriately classified as contractors.

Legal Action

Class action lawsuits by groups of independent contractors requesting employee status are becoming increasingly common. A contractor may successfully sue you for unemployment insurance, disability payments, workers compensation, employee benefits, stock options, profit sharing and retirement benefits by claiming they were effectually employees. Microsoft had to settle for $97 million a few years ago because of benefits denied to contractors who were later classified as employees.

$25 Million Allocated by the Department of Labor to Target MisclassificationThe Department of Labor has a $25 million budget for 2011 targeting independent contractor misclassification. The following text (in italics) from the DOL budget outlines the use of these funds and can been seen at there site here.

Employee Misclassification: Individuals wrongly classified as independent contractors are denied access to critical benefits and protections to which they may be entitled as regular employees. Worker misclassification also generates substantial losses to the Treasury and the Social Security, Medicare and Unemployment Insurance Trust Funds. To address this problem, the FY 2011 Budget includes a joint Labor-Treasury initiative to strengthen and coordinate Federal and State efforts to enforce statutory prohibitions, identify, and deter misclassification of employees as independent contractors. The Department of Labor's budget includes $25 million to support this initiative, comprised of:

Wage and Hour Division. An additional $12 million and 90 FTE are requested to focus on misclassification during targeted WHD investigations.
Employment and Training Administration. $11.25 million and 2 FTE are requested for competitive grants to States to increase their capacity to focus on misclassification and reward the States that are most successful at detecting and prosecuting employers that fail to pay their fair share of taxes due to misclassification.
Solicitor of Labor. $1.6 million and 10 FTE are requested to pursue misclassification litigation, including multi-State litigation to coordinate enforcement with States and leverage their groundbreaking work.
Occupational Safety and Health Administration. $150 thousand is requested to modify training curriculum and investigation guidelines to allow inspectors to identify potential employee misclassification and share information with WHD.

In addition, the budget proposes legislation to ensure the proper classification of employees by: (1) shifting the burden of proof to employers to demonstrate that their employees are classified correctly, (2) closing the loophole created by Section 530 of the Revenue Act of 1978, and (3) making misclassification a violation of the Fair Labor Standards Act, with appropriate penalties.

Additional Resources and Readings

Navigating Independent Contractor Compliance

Proposed Changes: 1099 Independent Contractor Classification and Misclassification Penaltie

Independent Contractors Or 1099 Employees - The Risks

Originally posted on March 31, 2011

Temporary Staffing News From Emergent

2011-10-17T14:54:00Z

Welcome

Over the past several months we have communicated with executives and owners at some of the largest publicly-held and private staffingcompanies,mid-size staffing firms,independent recruiters, andclient companies that spend millions of dollars in contingent labor eachyear.

From these conversations, we have begun to gain tremendous insight on the marketplace, challenges that companies are facing, as well as how they are starting to utilize contingent labor. The contingent staffing landscape is changing fast, so we thought it would be valuable to share our findings with you in this newsletter which we’ll send out twice a month.

Overall we have seen staffing industry optimism increase as well as marginsand cost of contingent labor remain extremely competitive.Some staffing companies that have focused niches or geographic focus have been able to maintain markup rates (fees on top of worker pay rates) in the high thirty to low forty percentile range, however many of the more traditional staffing companies we have talked to are providing services with markups in the low to mid-thirty percentile ranges.

Additionally, client companies have looked to source their own contingent labor to drive down costs. Although the demand for temporary labor is increasing steadily contingent workforce service providers and the companies that use them are looking towards innovation and flexibility to help their companies gain the most value from this emerging workforce.

Our mission is to help the companies the use and supply contingent labor (temps, contractors, consultants, and project-based workers) increase profitability while decreasing cost and risk. We hope that this newsletter will provide you with information that will help you and your business.

If you would like to speak with me personally about contingent labor trends or for on advice on using contingent labor, please feel free to reach out to me at binman@emergent.com

I look forward to speaking with you,

Bill Inman

President

Emergent

binman@emergent.com

emergent.com

N.B. To view the full version of this newsletter, please go to http://ow.ly/4epfS

Originally posted on March 14, 2011

Companies see Temps as Permanent Solution

2011-10-17T14:54:00Z

Overall, temporary help payrolls are up by almost half a million since they bottomed out in September 2009, according to the department of Labor. Lots of companies are relying more than ever on temporary workers to fill their employment needs. In the past, the increase in the use of temporary workers indicated that it wouldn’t be long before we saw an increase in the permanent job market. In previous recessions, companies simply laid off workers and then hired them back again when the recession was over. Thing is, lots of businesses found that they just kept running into the same problems each time the economy ran into trouble.

Many analysts are predicting that we’re at the beginning of a permanent, structural shift towards temporary workers making up a large proportion of the labor force. Interestingly, whereas temporary job opportunities have previously been mostly light industrial or clerical in nature, this time around, jobs in Legal, IT and other professional industries are shifting towards a contract/freelance model as well.

Are employers wary of hiring full-time employees because of the uncertain economy? Most certainly. But they are also likely to be unwilling to commit to the seemingly never-ending hikes in health insurance costs too.

Hiring temporary workers is being increasingly seen by many as a cost-effective solution to a staffing problem, enabling companies to scale up or down quickly to meet demand without an enduring obligation to the temporary worker. However, navigating complex co-employment rules and the new stringent IRS 1099 classification requirements, means that employing temporary workers is becoming fraught with risk – for both the company working with the temporary workers and the staffing company who recruits the those workers.

Emergent can provide stable contingent workforce solutions that allow staffing companies and their clients to recruit workers, while Emergent takes care of the rest (including legal, payroll, invoicing, insurance, tax, HR and workers’ comp administration). To find out more, e-mail us at info@emergent.com or visit us at www.emergent.com.

Originally posted on February 9th, 2011

Temporary Jobs Seen as Likely Path to Permanent Hire

2011-10-17T14:54:00Z

More than half of U.S. adults (54%) agree that finding a temporary job is the best option following a layoff, according to a new online survey commissioned by EmploymentGroup, a Midwest staffing and contracted services firm, and conducted by Harris Interactive®. The poll coincides with the latest Labor Department payrolls data that show U.S. employment rose far less than expected in January, suggesting continued weakness in the job market.

The survey, which aimed to quantify the appeal of several frequently cited options available to unemployed workers, found that pursuing a temp job (defined as a transitional job held while looking for permanent employment) is preferred by a wide margin to going back to school to learn a new skill or profession (21%), waiting for the right opportunity while receiving unemployment assistance (11%), starting a new business (5%), or something else (8%). The survey also examined the perceived value of temporary employment. A majority of adults (70%) say that landing a temp job often leads to a permanent position, and 74% agree that it adds value to a resume – an opinion voiced most strongly by unemployed (78%) and retired (85%) workers. The online survey of 2,026 adults aged 18 and over, was conducted in January 2011. "While it has been widely reported that temp hiring is up, some have suggested that in the current economy traditional perceptions of the temp job have changed – from a potential path to full-time employment to just another dead end," said Mark Lancaster, CEO of EmploymentGroup. "These latest survey results paint a different picture. Despite significant, persistent challenges in the job market, public opinion regarding the value and long-term career potential of temporary employment remains strong.

The survey provided some additional interesting findings regarding perceptions of temporary employment: · Women are more likely to agree that temp jobs often lead to a permanent position (74%), versus men (66%); · Temp jobs hold more appeal for older women: 63% of women ages 55 and older feel temporary employment is the best option following a layoff, versus 56% of all adult women and 51% of men ages 55 and older; · Across all household income categories, the temp job option holds the most appeal for those earning between $35,000 and $49,900 · Part-time workers are much more likely to agree temp employment is the best option following a layoff than full-time or self-employed workers (63% vs. 53%); · Ranges in U.S. geographic region and household size didn't seem nearly as relevant in predicting perceptions regarding temporary employment as gender, age and employment status

Originally posted on February 9th, 2011

Why Is The Contingent Workforce Experiencing Such Rapid Growth?

2011-10-17T14:54:00Z

Research indicates that one third of the U.S. work force is now comprised of Contingent Workers, who are sometimes referred to as freelancers, contractors or temps. This group of workers is growing at more than twice the rate of the full-time work force and the trend looks set to continue into the foreseeable future (Contract Talent: An Imperative for Talent Management in the New Normal, The Human Capital Institute, 2010).

Contingent workers provide convenient, flexible, specialized skills that best fit the changing needs of the modern workplace. Here are the top three reasons companies are choosing to hire temporary employees:

Savings on time and money

Contingent workers are normally employed by the staffing company that sourced the worker or via an Employer of Record service like Emergent (www.emergent.com). This means that all of the responsibilities of an employer, such as payroll, insurance, legal, HR and benefits administration rest with the staffing company or the Employer of Record – saving the client company time and money.

Short term help

Many companies have a significantly smaller staff that they had a couple of years ago. Yet the same amount of work (or more!) has to be done. Hiring contingent workers on a project basis to help during busy periods with no obligation to continue to work with the contractor after the project is complete.

Opportunity to “try before you buy”

Hiring a contingent worker on a temporary basis with a view to filling a permanent role is becoming increasingly common. It allows both the company and the contingent worker to ensure that they are the right fit for each other. If not, the company is free to end the contract at the end of the trial period without any further obligation.

About Emergent

Emergent provides industry-leading contingent workforce services that help clients save money, decrease risk, and reduce the time taken to find and utilize high-quality talent. Our team will handle all payroll, tax remittance, human resource management, invoicing, accounts receivable, and workers’ compensation insurance at a significantly lower cost. We can also provide contingent workers with access to personal health benefits.

To find out how Emergent can help your company reduce the risk and cost of utilizing contingent staff, complete our information request form or call 855-250-5000.

Originally posted February 9, 2011