Corporate Services FAQ

Q. How does IPS save my company money?

A. First and foremost, IPS services are set up and managed at no cost to business partners. In addition, IPS helps your company:

• Avoid significant penalties, back taxes, and fines tied to reclassification of 1099 workers

• Engage with independent professionals, quickly and easily

• Improve ROI through a reduction in time and money spent on unproductive administrative services like setting up contracts for new independent hires, reconciling invoices, and issuing checks

• Reduce the likelihood of expensive class action lawsuits and other liabilities related to co-employment

Q. How do I track the compliance status of my company’s independent workforce and ensure that we won’t be faced with misclassification?

A. Using a system that combines electronic processes with human oversight, IPS performs an annual compliance check of each independent worker in your organization to ensure that the worker is properly classified. At any time, if we discover an independent is in a state of non-compliance, we reclassify them as a W-2 employee and put them on the IPS payroll – eliminating the possibility of risk to your business. In addition, for audit purposes, or at your request, IPS can provide you with a detailed report of the compliance status of all your contract workers.

Q. I heard that the “20-Question Test” (or 20-Factor Test) was going to be invalidated and that our business would no longer need to prove compliance using this test.

A. Since Section 1706 of the Tax Reform Act was passed in 1986, the “20 Questions Test,” which is the primary vehicle companies refer to when determining independent contractor status versus permanment employement status, has been up in the air. There always seems to be a lobby for repealing or modifying the legislation. At this point in time however, there are no viable plans to invalidate the “20 Question Test.” To the contrary, Senator Barack Obama has a bill currently in the Senate Finance Committee that would eliminate the “everybody’s doing it” defense of industry practice as a justification for worker misclassification.

Q. One of my biggest challenges with independent contractors is them "jumping ship" in the middle of a project – leaving us to find and train new people midstream.

A. IPS actually helps lower risk in the area of contractor accountability and performance with our proprietary system. We have special programs that incent contractors to stay throughout project completion and reduce the risk of costly project overruns. Contact us and we’d be happy to share details with you.

Q. With a focus on speed to market, how do we onboard new independent professionals/contractors quickly?

A.When your business engages with IPS, we set up a master agreement which serves as the contract to which you add existing and/or newly hired contractors. This process alleviates the unnecessary administration and legal involvement that comes with setting up new contracts for each independent or vendor that works with your company.

Q. I am content with the staffing agencies or VMOs that I have been working with years. Everything is in order and operating smoothly.

A. Using IPS as the “employer-of-record” for all your internally sourced contractor needs will save you hundreds of thousands of dollars in fees, and better protect your company from the risks associated with co-employment. In addition, we will work with VMO’s as a specialty vendor, while offering the independent professional the benefits of an attractive and stable work environment.

Q. How do I report on expenditures accumulated by my independent workforce?

A. IPS can provide you with customized reports on a weekly, monthly, or on-demand basis. All data is broken down by categories for easy manipulation and integration into your own systems.

Q. We work with dozens of preferred staffing vendors and a VMO that cumulatively makes timesheet, invoice, and expense processing management a huge challenge. We need to streamline this process.

A. IPS sets up and manages a process for timesheets, invoices, and expenses for your internally sourced independent professionals and other vendors. To minimize errors, we run audits to ensure that master agreements are in place, contractor authorizations are set, and bill rates match authorizations. And, at your request we can run customized reports on contract status, and costs, among other custom items, for your review.

Q. Independent contractors are often viewed as unattached and difficult to motivate. How do I get the most out of my contractors, and make them feel part of a team without risking 1099 misclassification?

A. Keeping your independent workforce motivated and engaged, while keeping them at arms length is an ongoing challenge for most companies. It is possible to get more out of your contract workforce without crossing the lines of misclassification. Although you can’t extend formal benefits, you can motivate them by praising or rewarding a job well done, and making flexible scheduling options available. IPS offers independent contractors the flexibility and freedom that comes with running their own business – without the administrative hassle. In addition, you can offer your contractors engagement with companies like IPS who are able to offer top-notch business benefits and insurance at group rates including corporate-style health and dental benefits, pre-tax expense accounts, 401K, and profit sharing. You can choose to pay for this service on behalf of your contractors, or you can offset the cost to the independent contractor. The fees are minimal in comparison to the level of benefit received.