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Fortune 500 Retail Company Mitigates Misclassification Risk
Doubled
Program Growth Year over Year
Total
Risk Mitigation Achieved
Situation
From Misclassification to a Managed Program
A Fortune 500 retail company based in the Midwest was struggling with contingent labor compliance. They were beginning to see heightened awareness around worker misclassification at a federal level and realized that state and local governments were missing out on potential revenue due to misclassified workers. This knowledge inspired the organization to take a closer look at their own classification practices. They quickly realized that their current systems were putting them at risk for co-employment and independent contractor reclassification. They needed a stricter background check system and a way to compliantly engage a diverse population of freelance workers.
GATE
As a result of this program, the client's SVP of Procurement won a corporate award for his work in risk mitigation.
Solution
Improved Visibility through Program Transparency
The organization initially used a combination of VMS and MSP providers to manage independent contractor sourcing and engagement. MBO discovered that the majority of their 1099 workforce-which consisted of everything from IT professionals to models and photographers-did not meet the standard level of self-employability to qualify to work as a 1099 independent contractor. This put the organization at risk for worker misclassification and made it difficult to systematically drive cost-savings opportunities. MBO helped the organization develop a variety of engagement programs that fit the diverse needs of their independent contractor population. This helped create better cost visibility because independent talent did not have to go through a variety of agencies to work with the organization-there was now a single point of entry. This created a win-win situation for the organization and for talent: it mitigated misclassification risk for the company and contingent workers were able to work the way they wanted.
Results
Total Risk Mitigation Achieved
For the organization, mitigating risk was about more than just facilitating compliance. The company now has greater program transparency and cost visibility for all managers who engage independent talent. With the new compliance program in place, spend under management has increased, and the organization has minimized reclassification risk as well as other business liabilities. The SVP of Procurement even won a corporate award for work on risk mitigation. In the future, the organization plans on expanding manager and independent contractor education on the benefits of a comprehensive compliance program and growing their access to skilled, independent talent via direct sourcing.
Industry
Consumer Goods and Services
Number of employees
60,000
Company revenue
$13 Billion
Areas served
United States, United Kingdom, and China
Doubled
Program Growth Year over Year
Total
Risk Mitigation Achieved
Jenna Kinter
Vice President, Enterprise Solutions
Jenna has successfully worked with a number of clients in various industries and has gained an in-depth understanding of their needs so that MBO can help them meet their business requirements and goals.
