He Said/She Said
In any worker classification investigation, at some point the investigator or auditor is going to interview your Independent Contractors. That interview will either occur face to face, over the phone, or via a written questionnaire, commonly called a WORKER RELATIONSHIP QUESTIONNAIRE (WRQ). WRQs are typically between 25-50 questions but can be as long as 100 questions. The Independent Contractors being interviewed are asked to answer all questions and return their responses to the auditor.
Here are real examples of the questions that are asked on WRQs:
Did you go through training?
Did you have a manager?
Did you have to wear a uniform?
Did you attend meetings?
Who paid you?
What was your job title?
Do you advertise your business? If so, where?
What investments have you made into your business?
How are you notified about work?
Do you have an office?
Do you perform services for companies similar to XXXXXXX?
The above is just a sample of the questions that are asked. The implications of the WRQ process is very straightforward. The investigator is looking to build a case against your firm so they can reclassify your workers, collect back taxes or premiums, and force you to switch these individuals from Independent Contractors to W2 Employees. If the majority of your Independent Contractors (who complete the questionnaire) answer these questions unfavorably from a relationship standpoint, the investigator will not rule in your favor, despite how compliant your business is with regulatory statutes.
Regardless of how long the WRQ is, the legal relationship from the perspective of the investigator can be determined with just two questions:
Do you believe you’re an Independent Contractor? Why?
An Independent Contractor who can articulate why he or she is operating their own business is the greatest asset any company can have when dealing with an investigation of this sort.
There is no better time to determine whether an Independent Contractor believes they’re truly independent and can articulate why they believe they’re an Independent Contractor than during the onboarding process. You can potentially save yourself a lot of stress and heartache by implementing an additional question into your interview and onboarding process and choosing to work only with those individuals who meet your standards of independence:
Do you understand what it means to be an Independent Contractor? What does it mean to you?
To discuss further or if you have any other questions related to independent contractor compliance, please contact DDI today at 949-398-0489 or firstname.lastname@example.org.