Subscribe to Email Updates

Get Free Widget
bg-img11.jpg

Two Compliance Lessons That Apply Across Industries

Brian Quinn
By Brian Quinn
on January 03, 2020

The influence of changing regulatory demands creates real-world challenges for organizations working in every industry and location. A look at how two financial services companies addressed unique compliance needs reveals that a strategic approach to compliance is essential regardless of geography or sector.

Keep reading for the case studies, then click the box below for a copy of our latest report, “Demystifying Compliance: Priorities for a Workforce Advantage.” In addition to the case studies, the white paper offers insight into key regulatory and compliance issues, as well as strategies for business success.


Get the Free Report

Case Study #1: Defining the Flexible Workforce Now a Priority Under New Regulations

Worker classification represents one of the most critical challenges for addressing multiple compliance topics today. In the case of one financial services leader, a lack of common definitions to classify the myriad of workers engaging with the company was seen as an urgent business risk.

The challenges of classification touched on several recent and emerging regulatory developments. For example, GDPR (the European Union’s data privacy regulation) and the California Consumer Privacy Act would require the company to know what types of workers were interacting with different systems and data around the world, as well as determine how that data is handled. Similarly, the IR35 law in the UK would demand that the company treat taxes on employee and contractor pay appropriate to their classifications.

To help clarify and address the challenges ahead, the company turned to AGS for insight based on its experience supporting clients facing similar needs around the world. The refocus effort included roundtable discussions that brought together senior management in an unprecedented strategic workforce compliance workshop.


Collaboration Brings New Compliance Advantages

The result of the initial collaboration and subsequent follow-on activities have led to three advantages that position the financial services company to address future classification issues better. Those advantages include the following.

  • Clarity on the Regulatory Landscape: To complement the primary view of the internal legal team, AGS offered a perspective that directly connected regulatory demands to the practical aspects of workforce strategy. Areas of concern included a need for visibility into all workers engaged by the company, a system for defining their status as employees or non-employees, and a strategy for addressing the implications in terms of taxes, benefits, and other employer requirements.
  • Insight on Classification Taxonomy: An effective classification strategy begins with developing a taxonomy that guides the determination of each worker type. In the knowledge-sharing sessions, AGS worked with the company to set the groundwork on fundamental worker types and their associated definitions. Areas of focus included terminology such as staff augmentation, management consulting, professional services, and outsourcing. Each term represents a model for engaging workers that has specific regulatory implications.
  • Available Resources and Technology to Boost Workforce Visibility: While the collaboration established essential awareness and support for enterprise-level worker classification, the AGS partnership left the option for accelerating the effort, if needed, leading up to the effective date of new regulations. This option is enabled through a resource management solution that uses technology driven by artificial intelligence to automatically assess contractor and services provider data faster than a manual approach. This process ensures proper classification and identifies potential risk points (i.e., contractors who likely should be treated as employees in the eyes of the law).

A Vital Strategy for the Gig Economy

With the foundation for worker classification that spans all parts of the organization, the financial services company is now on a path to keep ahead of new regulations. From payment and benefits to termination, taxation, and a host of related employment law issues, clarity about who is, and who is not, considered an employee will be essential for a future involving an increasingly flexible and varied workforce.


Case Study #2: Evolving Employee and Contingent Recruitment for Changing Immigration Demands

In another example, a leading U.S. financial institution recently experienced an incident related to compliance with federal regulations. That incident stemmed from increased scrutiny on how the company processed candidates in its recruitment efforts. Due to inconsistent approaches in sourcing candidates from suppliers, the company could not always supply relevant information when oversight agencies such as the U.S. Citizenship and Immigration Services (USCIS) sought data to confirm a contractor’s visa status.

To address the issue, the company worked with its AGS talent partner to establish a roadmap for aligning a complex array of talent engagement processes involving pre-identified workers. While the organization had transparency around activities such as posting requests, managing candidate information, and performing drug screening for sourced contractors, the same level of consistency did not extend to suppliers with pre-identified contractors. But through its AGS partnership, the company successfully launched a strategy focused on correcting key workflow needs across its entire workforce supply chain.


A Standardized Flow of Candidate Submissions

Among the initial topics tackled was the fact that talent suppliers varied their approach to candidate submissions. Often, a supplier with a pre-identified contractor would provide potential candidates to the company’s managed services provider (MSP) with a job title and little or no documented job responsibilities. The newly updated process establishes a more consistent workflow, requiring that managers submit a request before identifying a candidate.

This improvement allows the MSP to document a role’s true need and its requirements, after which suppliers must provide candidate resumes that match the need. If USCIS later audits the hire, the request and resume will verify the selected worker’s role and previous activity, and it would confirm that they correspond with the candidate’s visa letter while satisfying the requirements.


Establishing Consistency

Based on a true partnership between the employer and AGS, the company now has an opportunity for change that will ensure the correct workflow goes into effect for all talent suppliers. In a regulatory environment where accurate information is a must, a consistent process flow promotes active talent engagement and positions the organization to have the right data to meet increasingly demanding regulatory needs. Reducing risk and improving workflow is not only good for compliance; it is essential for driving an effective workforce strategy in a challenging industry.


Download the Report

Our latest white paper can help organizations recognize the factors that influence compliance and create a proactive approach to tackling them. Get your free copy of the “Demystifying Compliance” report today and then contact us to learn more about building or enhancing your relationship with Allegis Global Solutions.

Get the Free Report

Leave a comment

Brian Quinn
Written by Brian Quinn
Brian serves as the Executive Director, Operations of Allegis Global Solutions.

Related posts

Apply a Compliance Approach to Strengthen Business Success
Apply a Compliance Approach to Strengthen Business Success
Brian Quinn
By Brian Quinn
on February 25, 2020

In managing compliance, organizations face several challenges. First, employers may underestimate the preparation needed for...