For more than 25 years, MBO Partners has been serving the project economy in the U.S. Today, the rest of the world is catching on, creating significant new challenges in the management of independent professionals globally. With so many countries entering the independent engagement scene, the lack of clarity or consistency of regulations has created a need for industry experts to step in and take the lead.
In order to keep pace with the demand of global customers, MBO Enterprise Solutions has established a strategic alliance with JLM Compliance, a consulting firm base in the UK.
Although MBO Enterprise Solutions will still focus on domestic engagement of independent consultants, we can now provide advice and solutions consulting for clients who also use workers in countries outside of the US.
To expand awareness of this new initiative, MBO Enterprise Solutions also has started an International Blog on our website to highlight the IC compliance landscape in different counties. In this format, we will regularly spotlight a country with a unique set of challenges and provide an overview of key points to understand when engaging independent workers from that country. We will also provide the common options for engagement in these countries.
Our clients often ask if we can engage a foreign independent consultant in their own country. Now, we can offer ways to seamlessly subcontract to firms outside of the US for our American clients, keeping the one face to our clients that they so value from MBO.
Here’s the problem that our solutions solves for: temporary staffing firms only recruit the resource, while another firm bills for them. Invoicing consists of a detailed, itemized list of all charges for that worker’s rate, taxes, insurances, paid leave and any number of other government-mandated deductions. A fee for the staffing firm and the payroll agency is also included in that invoice. A common challenge with this is that our clients often confuse temporary workers in these countries for IC’s. This is because in most other countries, temp workers are engaged by a third party payrolling firm and not the firm that recruited them. These firms appear to be vendors, so that individual temp worker can be confused with a real IC who also uses these third-party payrolling organizations.
A true independent consultant could be registered as either self-employed or incorporated as a business, but foreign counties often oversimplify how they define IC’s. Either the individual has made the proper provisions for self-employment by paying the proper taxes and carrying the correct level of insurance, or they have not and thus must be traditionally employed. One dangerous consequence of this generalization is that realistically, every country is different, every worker has different situations and every assignment can alter what would be the appropriate, compliant engagement. It is exactly for that reason that MBO has chosen to partner with JLM Consulting.
Using a compliance offer as our key executive level contact, we can evaluate every situation and recommend at least two options: either a compliant, “by the book” engagement option, or a commercially viable option that takes into consideration the level of risk and the worker’s individual situation, including project requirements. We often find the worker can be safely engaged through a low-cost third party with a small flat fee per invoice.
As a final note, it should also be clear that following the rules set for the traditional staffing firms in each country will almost always satisfy the compliance requirements; ICs possess an independent mindset no matter where they live. They want to set their own rate, find their own projects, and set their own terms to satisfy their country’s taxation and social funding obligations. This specialized talent is notorious for rejecting conventional employment relationships, and in some countries, they will avoid traditional programs if they aren’t afforded the independent option. We should know; it’s no different in the United States.
To tackle these issues, we will feature a different country each month, featuring JLM senior compliance officer, John Le Maire’s personal take on their regulations, compliance temperament and even the local labor culture. Look forward to hearing from us – and John – about international issues with consulting engagement.