Avoid contractor misclassification risk
Governments are increasingly tightening rules around worker classification. Misclassifying contractors as employees (or vice versa) can expose your business to financial penalties, back taxes, and legal challenges.
Our compliance risk tool shows where your business may be exposed and how to stay compliant. Answers are confidential, no personal information required.
Low Risk
Based on your answers, your business is currently at a low risk of contractor misclassification. While this is a positive sign, employment laws continue to evolve, and it is important to keep your compliance practices under regular review. Staying proactive will help you avoid future penalties and maintain confidence in your contractor management.
Speak to our experts today to understand how you can reduce your compliance risk.
Medium Risk
You may have potential gaps in how you are classifying contractors. While not immediately severe, these issues could still leave you open to penalties and compliance challenges if not addressed. Now is the right time to tighten your processes, review contracts, and ensure compliance before risks escalate.
Speak to our experts today to understand how you can reduce your compliance risk.
High Risk
Your responses indicate a high risk of contractor misclassification. This means your business may not be meeting local employment regulations, leaving you vulnerable to significant fines, penalties, and legal disputes. Addressing this risk quickly is essential. Consider reviewing your contractor agreements and classification processes to protect your business.
Speak to our experts today to understand how you can reduce your compliance risk.
Frequently Asked Questions
Contractor misclassification happens when a worker is incorrectly labeled as a contractor instead of an employee, or the other way around. Each country has its own rules for determining worker status. Misclassification can lead to unpaid taxes, penalties, and legal disputes.
Misclassification can expose your business to significant risks. These include fines from tax authorities, reputational damage, back payments for benefits or social contributions, and even legal action. Ensuring the correct status for every worker protects your business from costly mistakes.
Risk often depends on factors such as how much control you have over the work, whether the contractor can work for multiple clients, and whether they use their own equipment. Our contractor compliance risk tool provides an initial indication of your risk level based on common misclassification factors.
No. This tool is designed to give you an indication of your potential risk level. It does not replace legal or professional advice. For a thorough review of your contractor arrangements, we recommend speaking with our compliance experts or seeking independent legal guidance.
Employment laws and tax regulations are constantly evolving. It is good practice to review your contractor arrangements regularly, particularly when entering new markets, signing new contracts, or making changes to your workforce model. Staying proactive helps reduce your risk.
If authorities determine that contractors have been misclassified, your business may face back taxes, fines, and penalties. You may also be required to provide benefits or compensation retrospectively. In some cases, this can result in legal action and reputational damage.
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