Workplace Laws to Consider When Your Organization Works with Freelancers

In recent years, labor laws and workforce regulation has become more prevalent, and companies who ignore workplace laws and guidelines may be opening themselves up to business and financial risk. 

Fiverr Enterprise helps you to compliantly hire on-demand talent that meets any need, no matter where they work in the world, and without risking falling foul of any workplace laws or regulations. 

Read on to learn about common workplace laws, and how they are impacted by leaning on a freelance worker strategy. 

This is part of an extensive series of guides about compliance management.

What Are Workplace Laws?

Exactly as it says on the label, workplace laws are any legal obligations or regulations that organizations have to follow or be aware of when hiring their workforce. In some cases, workplace laws are specific to employees — for example parental leave and sick pay. In other cases, even if you hire a non-traditional workforce, you still need to stay on top of specific laws. 

Key Areas Covered by Workplace Laws

Here are seven areas that are governed by workplace laws, and where your organization needs to pay attention to make sure it remains two steps ahead of any penalties or legal action. Remember, many of these laws are only relevant for companies with 50 or more FTE

  • Employment Discrimination: According to the Equal Employment Opportunity Commission (EEOC), it is illegal to discriminate against someone because of that person’s race, color, religion, sex (including gender identity, sexual orientation, and pregnancy), national origin, age, disability or genetic information. This is true whether you are hiring a freelancer or an employee. 
  • Wage and Hour Laws: The federal minimum wage is $7.25, and specific states have their own minimum wage laws, and in 29 cases these are higher than the federal minimum wage. Overtime should be paid at not less than 1.5x the normal hourly rate once a 40-hour work week has been completed. However, these laws generally do not apply to freelancers and consultants. 
  • Workplace Safety and Health: The Occupational Safety and Health Administration ensures that all employees experience a workplace free of hazards and danger to their health and wellbeing. While freelancers do have the right to safe working conditions, they are not covered by this administration. Employers who work with freelancers should make them aware of safety conditions, and monitor areas such as compliance. 
  • Workers’ Compensation: These laws relate to what happens if an employee is injured while at work, and primarily apply to employees only. Freelancers could purchase private insurance to provide compensation if they are unable to work. For employees, workers compensation usually provides a fixed monetary award for injured workers, to reduce the costs and resources associated with litigation.  
  • Employee Benefits: Most employee benefits do not apply to freelancers, and the lack of benefits is one of the ways that a freelancer avoids misclassification as an employee. Benefits include healthcare, sick days, vacation days, parental leave, and other perks such as equipment or training. As a result, freelancers often charge a mark-up to cover these elements for their own business. 
  • Privacy Rights: Those who work for private companies have the right to have their data kept private, including medical and genetic information, personal data, references, background checks, and any testing or monitoring such as for drugs and alcohol or location. Freelancers may ask organizations to sign privacy policies, or in turn — might be asked to sign NDAs, especially if they are working with multiple clients in the same industry. 
  • Labor Relations: Depending on the industry, there may be specific workplace laws that are applicable to your labor force. Examples include construction, transportation, or manufacturing. There are also broad laws and regulations you may need to be aware of such as whistleblower protection, protection for workers under 18, severance pay and more.

Ensuring Compliance with Workplace Laws in Your Business

To make sure you’re working compliantly and according to the letter of the law, it’s useful to develop clear policies and procedures — both for standard employees, and for non-traditional on-demand talent. 

It’s not helpful if only one decision maker understands the relevant laws and workplace regulations — you want to make sure that the whole business understands any expectations on the company. Conduct regular training both for HR and for the wider employee-base to keep them up to date on the latest changes for your industry. 

Establish and ensure fair employment practices from day one, such as setting salaries with minimum wage as a baseline, or advertising jobs with the right number of vacation and sick days clearly published. For freelancers, make ensuring there is no risk of misclassification part of the vetting process, so you don’t even interview a candidate who wouldn’t be able to compliantly work for your business. 

Put a process in place to maintain accurate and up to date records, both for employees and your contingent workforce. Freelancers often move on, take full-time jobs elsewhere, or change their rates and terms, so records make it easy to stay on top of worker needs, and with the right Freelancer Management System (FMS), will flag any risk of misclassification in real-time. 

For your internal employees, implement health and safety measures from day one — such as ergonomic chairs, smoke and carbon monoxide detectors, adequate heating and cooling systems and more. For freelancers, distribute safety information regularly, and make sure they know they are responsible for their own healthcare and benefits.

Finally, if there are any violations or concerns, handle them promptly and efficiently. If someone flags that a freelancer is working only for your business for example — this means they are technically an employee and need to be treated as such. Timely remediation will make it less likely that you will be subject to fines and penalties. 

How Fiverr Enterprise Helps with Avoiding Worker Misclassification

When it comes to workplace laws for freelance talent — misclassification is the big one to be aware of. If you misclassify workers as freelancers, you could be subject to back taxes, penalties, and reputational damage. 

Fiverr Enterprise automates and customizes the legal and tax compliance process to your specific business needs, so your teams aren’t weighed down by paperwork. Tax forms, background checks, NDAs, etc…we take care of it all.

From onboarding to offboarding, we give you peace of mind that every step of your freelance lifecycle is in order. If freelancers are no longer compliant for your business, they’re no longer working for you. 

We automatically monitor your relationships with your freelancers, including the validity of legal documents, and will alert you when risk arises, so you can take action and mitigate the risk of worker misclassification. 

Speak to one of our workforce experts and get a personalized demo to learn more. 

See Additional Guides on Key Compliance Management Topics

Together with our content partners, we have authored in-depth guides on several other topics that can also be useful as you explore the world of compliance management.


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