When you work with a Staffing or Virtual Assistant company to provide you with remote staff, you are contracting with a company, and it is the company’s responsibility to ensure that all of the necessary compliance is in place for the person they are supplying you with, right?
You see, regardless of the agreement you may have with the company you contract with, the Department of Labor, the IRS, and the State where the remote staff member resides, see it differently — ultimately they will hold you responsible for any non-compliance, misclassification and unpaid FICA taxes.
To understand why this is the case you need to understand two concepts:
- Employee or Independent Contractor Classification
When a staffing or virtual assistant company provides you with a remote staff member, a co-employment situation is created (regardless of whether it is formally documented as such) by the nature of the roles that you and the staffing company play. The virtual assistant company pays the remote staff member, and you supervise the remote staff member, giving them day to day instruction about the work you’d like done.
In a co-employment situation both employing parties have a joint legal responsibility for compliance, but typically in a contentious situation the supervising employer is held accountable first as the primary employer.
Various methods of classification are used to determine whether a US worker is an employee or independent contractor depending on the government agency and the State in question. Almost all methods share the following in common.
To classify a US worker as an independent contractor requires that all of the following apply:
- The individual is free from any control or direction in performing the services.
- The services performed are not ongoing.
- The services are outside the client’s usual course of business.
It is clear, that in the case of remote staff services such as virtual assistants, marketing assistants, bookkeepers etc. working for you continuously, that as a client you provide direction and exercise control over the work, that the work is ongoing, and that the work is part of the activities of your business.
On that basis then a remote executive assistant or ongoing virtual assistant is unequivocally an employee.
What does this mean for you? Should this put you off working with remote staff contracted through a staffing or virtual assistant company? The answer is that as long as the company you are contracting with is fulfilling all of the necessary employment responsibilities on your behalf, then there is absolutely no reason not to source team members in this way.
However, bear in mind that the virtual assistant industry is young, and the majority of virtual assistant companies hire their assistants as independent contractors. When you are choosing a vendor to work with, it is important to do your due diligence and ensure that their team are W2 employees, and that they fulfill all of the requirements of employment e.g. paid leave, workers comp insurance, overtime etc. If not, then you are exposed to compliance risk, and in many States can be held personally responsible for misclassification of your remote staff including heavy fines, back payment of taxes, and worse.
The safe thing to do is to ask your staffing or virtual assistant company to offer you documented proof that their US team members are W2 employees.
At Worldwide101 our premium subscription staffing services offer you full compliance peace of mind by taking care of all of the responsibilities of employment, so that you don’t have to. Worldwide101’s thriving culture of happy team members ensure longevity so that your remote staff have got you covered for the long term.