It is one of the hottest topics in contingent workforce management (CWM) this year, and for good reason. As rumors swirl and the talking heads make predictions, we must try to figure out how the ACA will affect the non-employee workforce. Sometimes, it is tough to separate fact from fiction.
- What do staffing buyers need to know?
- Who is responsible for contingent labor?
- What will happen to rates?
- What should I be tracking and how can a VMS help me?
- How can I avoid the increased risk related to worker misclassification?
Who owns the risk?One question that keeps popping up when engaging with staffing suppliers is, “Who is responsible for contingent workers?” Alden Bianchi said “Who owns the risk?” can easily translate into the question, “Whose employees are the folks, really?” Edward Lenz agreed and advised buyers to “Look to be sure that the staffing agreement is very explicit about what the staffing firm does.” He went on to say, “Look at the checklist of employer responsibilities on the staffing firm side of the ledger. If the staffing firm is paying the wages and benefits, withholds the employment taxes, recruits, screens and hires the employees – the contract should call for the staffing firm to establish employment policies governing the employees’ job performance.” He believes that “The staffing firm should also have and retain the right to control employees’ conduct at the work site, even though it may not necessarily be exercised.”
How do you protect your business from risk and stay compliant?Because the expert panelists represented both the buyer and the supplier side of the equation, there were also plenty of insights on how to best protect your business while adhering to the Affordable Care Act’s mandates. Brian McCourt suggested that contract language in supplier agreements should address the ACA and indemnification, specifically, as addressing healthcare and insurance concerns while onboarding contingent labor is critical. Of course, the increased visibility offered by a VMS was also a topic of discussion. The consensus was that you want to do everything you can to make sure your suppliers are compliant.
What will happen to rates?Healthcare coverage for contingent workers is here to stay, but who is going to foot the bill? Much of the uncertainty about the ACA has stemmed from both buyer and supplier concerns about the impact on rates. According to the experts, although there seems to be an increase, preliminary data indicates that rates may actually be well under $1.00/hour per worker. If suppliers raise their rates, you should ask them to “open their books” and be transparent about how they arrived at the new number. Of course, some suppliers of contingent labor have already addressed this issue so their bill rate will not increase.
TakeawaysGreg Muccio made a great point when he said, “It’s here, it’s not going away, so focus more on how you work through it instead of how to get around it.” The bottom line is that there will continue to be challenges as we adjust to the ACA. Here are a few expert insights gleaned during the webinar:
- Do not make the solution to your problem more complicated than the problem itself.
- Ask the right questions when engaging with staffing suppliers on the ACA.
- Explore the many ways a VMS can help you manage your non-employee workforce.