Many companies incorrectly believe that the responsibility for ensuring proper worker classification and addressing other regulatory compliance issues rests with the employer of record, often a staffing vendor or service provider. But In reality, if a compliance issue arises, the regulatory authority will follow the relationship from the worker to the recipient of the work product, including the hiring company.
All it takes is one claim asserting that a worker has been misclassified and should be an employee of the client company, or one workers compensation claim due to a work-related injury, and these claims could lead to an audit or even potential legal liability for the client company.
For these reasons, it is vitally important for a contingent workforce program to ensure that its vendors are compliant with all applicable laws and regulations. Your vendor management system (VMS) can help to ensure your vendors meet these standards.