Catalant offers compliance services to clients engaging with experts through Catalant’s Expert Marketplace. A client’s compliance services package may include a worker classification assessment followed by a background check. Read on to learn more about worker classification assessments.
What is worker classification?
Worker classification is a legal assessment that determines whether a worker should be engaged as an employee or an independent contractor for a given project.
Why do clients care about worker classification?
All companies must properly classify workers as employees vs. independent contractors in order to comply with employment laws. Failing to do so may result in penalties for their violations.
Some Catalant customers choose to outsource the worker classification assessments with Catalant. For those customers, the Catalant Compliance Team performs the worker classification assessments before the project starts.
Why do Experts have to undergo worker classification assessments for some projects but not others?
Worker classification assessments are an optional service for Catalant customers. Catalant only performs a worker classification assessment if it is included in the client’s services package.
What factors are reviewed to determine a worker is an independent contractor vs. an employee?
A worker classification assessment depends on the laws of the location where the work will be completed and the nature of the project.
Generally, these laws look at whether the company engaging the worker is exercising control over the worker. The more control exerted over a worker, the more likely it is that the worker should be classified as an employee for the project.
A worker classification assessment is not a black-and-white test; it depends on the laws of the location where the work will be completed and the nature of the project.
Worker classification assessments generally look at a number of factors, such as:
- Relationship control: length of engagement / permanency
- Financial control: method of payment, payment structure, opportunity for profit or loss
- Behavioral control: the worker’s ability to set their own schedule and use their own tools
For information about Catalant’s compliance process generally, please see Compliance Process Overview.
Important Note: This resource is for general information purposes only and may not cover important considerations that apply to you and your business. As such, the information provided below does not constitute legal or other professional advice. We recommend consulting with licensed legal and financial professionals in your jurisdiction to address your particular situation.