The Payroll Fraud Prevention Act (S.770) [PFPA], introduced April 8th, would amend the Fair Labor Standards Act of 1938 intended to eradicate employer misclassification of employees. The PFPA is focused specifically on independent contractors for payroll and unemployment purposes.
If enacted, the PFPA will:
- expand the FLSA to include independent contractors, placing their employment under DOL supervision making employers subject to audits
- require the DOL to report any misclassifications directly to the IRS
- institute a penalty from $1,110 to $5,000 per employee for employers caught violating payroll classifications
- set a provision of triple damages if an employer is caught violating the minimum wage or overtime laws for misclassified employees
- require companies to provide all employees with written notice on current policy detailing their individual status with the company
- pierce the so-called “corporate veil” to include independent contractors with business entity types of corporation or LLC
- establish under federal law a provision that makes it a “special prohibited act” to “wrongfully classify an employee as a non-employee”
Consistent with the labor policy of the current administration, the PFPA is a revision of the 2010 Employee Misclassification Prevention Act bill that ended up buried in subcommittees. Senators Tom Harkin (D-IA) and Sherrod Brown (D-OH) are the driving force of the Act, having sponsored both the EMPA and PFPA. For the 112th Congress, the Senators polished up last year’s language adding a section that calls for the Department of Labor to establish web page explaining how the PFPA impacts the FLSA should S.770 pass.
So far, the PFPA is still under consideration, assigned to the Senate Committee on Heath, Education, Labor and Pensions. It has yet to be introduced to this session of the House and as of now, has far less sponsors than its predecessor. Stay tuned.
For the latest info on the PFPA, check the bill’s Thomas page at the Library of Congress website.
At SourceRight Solutions, 2011 is off to a great start. We’re definitely seeing growth in certain market sectors, especially IT and financial services. More professionals have opted to become part of the contingent workforce as “free agents,” which has created a highly qualified talent pool to fulfill the uptick in exempt hiring requirements. In fact, we’re seeing an increasing trend in recruitment process outsourcing towards exempt-level hiring – a sharp contrast since historically RPO was more transactional – and now we’re being called into situations where our full range of skills and tools are being leveraged to source hard-to-find, passive candidates.
To oversee this growth, companies need to commit resources – whether internal, external or both. All of us witnessed organizations letting their recruiters go during the recent downturn. Many of our clients are now turning to us not only to help recruit but to also be part of broader strategic discussions with their hiring managers. Leveraging your MSP/RPO partner to counsel on how talent is developed and where the next wave of talent is coming from is becoming more commonplace.
Also becoming more frequent is the use of interim executives. An interim executive can fill the gaps created by winnowed-down management teams or newly created initiatives. The interim executive can also lay the groundwork for someone within the company to assume the responsibilities. This free agent-driven “knowledge transfer” approach has enormous benefits as companies gain the benefits of senior talent – including C-level – with considerably more experience than could be brought on staff. While images of grey haired sages might come to mind, the reality is that many of these interim executives are far from retirement age and possess unique entrepreneurial skills.
There’s also a new position being created within many forward-thinking organizations: the Global Talent Acquisition Leader. These individuals are responsible for overseeing organizational talent acquisition strategy, effectiveness and spend.
In closing, we anticipate growth in improving the management of “blended” workforces across all categories of talent—full-time, part-time contingent, contract, and alumni—by using integrated infrastructure, tools, and analytics to strategically optimize the resourcing and management of talent globally.
Most organizations have initiatives and programs that focus on the quality of the products or services that they deliver to their clients. This is important at multiple levels from retaining long term client relationships to cutting the general cost of operating the business. Getting quality institutionalized in the culture of an organization produces competitive differentiation for both the provider and the buyer involved in a quality service transaction. The question is how do you institutionalize a quality commitment in an organization’s culture?
SFN Group institutionalize quality through-out its operating culture by rolling out the “Service Excellence” quality management program. This was accomplished through a series of tools, best practices (some compensation-related) and integrated technology to drive a high quality, service delivery culture. Key attributes of the SFN Group Service Excellence program are the constant quality measurement of services delivered to clients and the visibility of that ongoing service performance to the client base and account management teams simultaneously. Quality service management is embedded in the organization’s culture.
With regards to MSP industry solutions, they typically engage the service metrics and satisfaction tracking capability of the deployed VMS tool in the MSP engagement. Hence, the comprehensiveness of the quality management program can vary across MSP programs. In order to engage a more comprehensive service quality management protocol SourceRight MSP is leveraging both the deployed VMS tool and SFN Group’s Service Excellence quality management program infrastructure.
To ensure customer, employee and supplier satisfaction, all “buyer” stakeholders within the MSP engagement will receive automated performance surveys (sent via e-mail) to gauge the success of the individual placements and their overall experience with SourceRight. SourceRight incrementally leverages two key survey processes to create visibility of MSP program satisfaction and service levels. The first is to leverage SFN Group’s well-established “Service Excellence” survey infrastructure to continuously collect the viewpoint of hiring managers and enterprise buyers engaging SourceRight’s MSP solutions. The second survey infrastructure used to measure SourceRight’s MSP engagement quality is the VMS tool being used in the client’s program. The VMS tool infrastructure is used to reach out to candidates and suppliers engaged in the client’s MSP program.
An MSP engagement involves multiple constituents/stakeholders and each has their own wants and needs in a services management solution. Assessing ongoing quality levels for satisfaction, service metrics and compliance are fundamental to sustaining high levels of quality in the MSP program. But making sure all the stakeholders engaged in the MSP program have a voice on service quality levels is critical to understanding the actual value being produced and delivered.
Results from SourceRight’s MSP team commitment to quality service delivery and hard wiring it into its operating practice can be measured by high rankings received in HRO Today and SIA industry customer satisfaction survey rankings. As a consequence, clients view SourceRight MSP as a “trusted advisor” based on the ability to understand key business drivers and identify cost-effective solutions/improvements. All this is facilitated by creating a comprehensive and visible service delivery baseline that all stakeholders in the MSP engagement can view, judge and leverage in delivering a high quality service experience.
As organizations are becoming more sophisticated in sourcing talent and demanding better results from their sourcing strategies, SourceRight Solutions is reinforcing their commitment to providing workforce management innovations by offering greater transparency on contingent workforce trends and providing an exclusive edge in a highly competitive environment.
SourceRight, recently announced the launch of SourcingEdge, a proprietary candidate sourcing methodology that is designed to help talent acquisition outsourcing clients gain a competitive edge in identifying the best and brightest talent from active and passive candidate pools. The SourcingEdge Career Networking Hub provides clients with rich talent pools; gives candidate access to thousands of job opportunities; provides career resources to aid in career searches; among other advantages.
SourceRight has also launched SourceRight Advisor for talent acquisition programs, a workforce analytics and thought leadership solution that draws on the company’s experience, aggregate business information, knowledge and scale to help businesses develop better-informed strategies to optimize their services and workforce management spend. SourceRight advisor will deliver specialized expertise and guidance including policy, compliance, change management, market intelligence and supplier relations.
The launch of SourcingEdge and SourceRight Advisor is the next phase of the company’s commitment to continuously revolutionizing recruitment strategies and services for today’s emerging workforce population.