VirgilHR, the technology company removing risk from HR compliance, launched a chat-based tool that provides research-backed information to help employers properly distinguish between employees and independent contractors during onboarding.
The conversational tool, which is part of VirgilHR’s comprehensive onboarding module, offers prescriptive guidance to help employers easily classify workers, and ensure compliance.
“Improper classification of workers can be costly to employers, but they currently lack an extensive resource that helps to navigate the complexity of labor laws,” said Jocelyn King, Founder and CEO of VirgilHR. “With our new chat-based tool, HR leaders will have access to an easy-to-use interface that offers guidance based on the latest research-backed information from all 50 states. Now, companies can classify workers with confidence.”
During onboarding, employers must designate whether a worker qualifies for income tax withholding and benefits as an employee, or is an independent contractor. The question is asked everywhere, but the answer can vary depending on an employer’s characteristics and location, and the characteristics of the role the worker will assume, such as power of control. Classification is governed by a tangle of federal regulations under the Fair Labor Standards Act. The laws also differ in each state as the criteria for independent contractor tests varies. VirgilHR’s state-specific tool offers real-time, accurate information that ensures employers make the right worker designation for their jurisdiction.
Employers could face a host of potential consequences as a result of improper classification, ranging from liability for failure to withhold income taxes, to class-action lawsuits for unprovided benefits. VirgilHR’s tool offers comprehensive information about independent contractor tests, including income tax withholding, wage and hour laws, workers’ compensation, unemployment insurance benefits, and discrimination laws.
To ensure that employers receive the latest, accurate legal information, VirgilHR worked with employment and labor attorneys to program the responses, and drew on the experiences of HR professionals to create a workflow that fits seamlessly into the onboarding process.
Available at no cost to current users, the tool is part of the onboarding module on VirgilHR’s comprehensive platform, which offers a “real-time legal guide by your side” to HR professionals. The release follows the recent launch of a chat-based tool for classifying employees as exempt vs. non-exempt. VirgilHR will continue to add new features to the onboarding module this fall.