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It has become crucial for employers to consult with their professional Benefit Consultants while drafting Benefit Plans where temporary and contract workers are involved. If the services of temporary workers are utilized by your company it would be prudent to become educated about co-employment to protect your company from exposure to litigation.

Many employers are unclear on the definition of co-employment. Co-employment can be defined as a relationship between two or more employers whereby each has the actual or potential legal rights and duties to the same employee. Where there is one employer there are certain responsibilities to the employee such as paying wages, paying overtime and taxes as well as providing Worker’s Compensation Benefits and Pension Plans together with ensuring civil rights compliance, the appropriate labor/management relations and providing a safe work site. These responsibilities are shared in a co-employment relationship where a person is usually a temporary worker. The lines are somewhat blurred but the consequences can be costly.

Some companies have been involved in legal challenges surrounding Benefit disputes concerning the rights of employees versus temporary workers. If there is any doubt, then the management and HR staff together with your expert Benefit Consultant may require legal consultation to ensure your company is compliant from a legal perspective. It may be necessary to modify benefit plan documents while reviewing any other company documents for explicit language that may imply the temporary worker is entitled to company Benefits.

Employees are not entitled to Benefits unless they are classified as “eligible” employees under a plan. This is regardless of whether or not they meet the common-law definition of “employee”. Employers and their expert Consultants can draft Employee Benefit Plans that exclude certain groups of workers. Contingent workers or those hired through a third-party agency can be excluded. Measures can and must be taken to help protect your company from employee misclassification which can lead to costly legal battles.
If there is a misclassification of your workers then your company can run into legal trouble with the IRS, the Department of Labor, State Taxing Authorities as well as the misclassified employee. The IRS is very aggressive at uncovering misclassified employees due to lost revenue as independent contractors are responsible for withholding their own taxes and Social Security payments. Many do not and this is seen as contributing to a significant underground economy that robs the government and taxpayers. Also the Federal Government is relied upon to protect workers. When businesses fail to pay into Social Security, disability and unemployment programs, simply by misclassifying employees as independent contractors, then they are defrauding workers out of their rightfully earned benefits

Your expert Benefit Consultant will agree that the unintended disputes over co-employment/misclassification issues have more to do with failure to properly craft Benefit Plans than with any issues surrounding the employee’s assignment or length of employment.

Contact professional Employee Benefits Consultants TODAY!

About The Author: For similiar articles please see:
EMPLOYEE BENEFITS CONSULTANTS and EMPLOYEE BENEFIT CONSULTANTS
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