FREELANCER PAYROLLING SOLUTIONS Why using a third-party for freelancers makes sense today click to read © 2014 Yoh Services LLC | A Day & Zimmermann Company p. 1 WHAT’S INSIDE 03 FREELANCER PAYROLLING SOLUTIONS: WHY USING A THIRD-PARTY FOR FREELANCERS MAKES SENSE Demand is increasing for a burgeoning freelancer population. But how do companies obtain the right talent while navigating the potential risk in leveraging this group? Voila! Third party expertise. INTRODUCTION From digital media to the introduction of new devices to drive larger initiatives around auditing freelance and technology, companies are looking for the best and independent contractor resources, companies freelancer talent to help secure audiences and offer are starting to look for help to build a centralized quality content across a variety of platforms. Specifically freelancer payrolling program that protects them in media and technology, highly-specialized freelance from risk. workers have been used on small projects, limited In this eBook, you will learn: productions and on an “as-needed” basis for many years. • What is payrolling? New technology is driving new standards in developing • The benefits of payrolling freelance workers and deploying content while new advertising models • Who can benefit from a freelance payrolling are being developed and tested to adapt to various program and examples in use today modes of content delivery. These specialized resources can help to quickly build and maintain new content offerings, brands and services. The freelance population of production experts, However, making sure freelancers can be quickly specialized talent and technology consultants can engaged when needed, paid efficiently and provide the highly-skilled talent companies need to administratively managed while on assignment stay competitive and respond quickly to new projects creates an HR or procurement nightmare for many and ideas. A freelancer payrolling solution provides companies. Not only has this population started to the employment support to keep them happy and multiply, but with state and local governments starting productive. © 2014 Yoh Services LLC | A Day & Zimmermann Company p. 3 CHAPTER 1 What is Payroll? In short, payrolling is administratively managing non-employee workers, such as freelancers, through a third-party that becomes the legal employer of the freelancer. The third-party company manages the employment relationship, thereby taking the burden from the company utilizing the freelancer. This relationship, if properly structured, provides the company with a way to take advantage of the skills of the freelance worker, while not having to hire the worker as an employee. This is distinct from temporary staffing or other recruiting solutions, because payrolling is used for workers and freelancers already known to the company. That is, these are people that the customer knows they want to use on a project, © 2014 Yoh Services LLC | A Day & Zimmermann Company p. 4 knows their skills and abilities and in many cases may employment communications, support and on- have already worked with them before. Freelancers, going payroll and benefits support during the independent contractors, interns, and retires are all assignment. examples of this type of worker. This employment relationship protects the customer from co-employment concerns and provides the freelancer with a valid and attentive employer. The third-party payrolling company is responsible for the on-boarding and on-going administrative management of the freelancer, by providing The costs for freelancer payrolling services are typically essentially the same working relationship as most on an hourly basis, only for time worked. Many other employers and employees. However, the worker is freelancer payment formats can also be supported, assigned to the client, working under the day-to- The costs for freelancer including daily rates or rates by appearance. day direction of the client. payrolling services are typically on an hourly basis, only for time worked. Many other freelancer The third-party payrolling company charges a small payment formats can also be The payrolling company is responsible for: supported, including daily rates percentage fee on top of the freelancer’s hourly or or rates by appearance. • On-boarding – Collecting and verifying all daily rate to provide the employment services. Some employment paperwork such as I-9 forms, W-4 tax freelancers also bring their equipment or “kits” and forms and any other state or federal employment can provide them at a small additional charge. requirements. • Taxes and Insurance – Worker’s compensation Billing for these services can be handled on an insurance, employment taxes and all other required individual or consolidated basis, with the payrolling employment costs. company providing detailed breakdowns of freelancer • Payroll and benefits administration – providing hours by cost center or production. Payrolling services time tracking and periodic payroll to freelancers can also include travel and expenses for on-location as well as any applicable benefits packages. shoots or other expenses like travel advances, bonuses or other necessary work-related expenses. • Communications and employee care – Providing © 2014 Yoh Services LLC | A Day & Zimmermann Company p. 5 CHAPTER 2 Benefits of Payrolling Freelancers Having a truly flexible workforce in many industries means finding and employing several different types of freelancers or specialists, many for short projects or productions. After the production, project or event ends, the freelancer may be needed immediately or not for many weeks. This creates an issue for managing this population of casual employees, specifically around getting them hired and paid. Thus, the primary benefit of using a payrolling provider for freelancers is the freedom to engage the workers when needed, without having to employ them directly or be concerned with © 2014 Yoh Services LLC | A Day & Zimmermann Company p. 6 their employment status, required paperwork or large headache for HR or procurement to monitor and providing them with a paycheck. pay accurately. Payrolling companies can provide freelancers with hourly, daily or fixed payments quickly and easily. But there are also several other benefits to using this model to engage freelancers. They include: Clear delineation of employment and insulation Quick ramp up – With a freelancer payrolling solution in place, workers can be called in with the knowledge from co-employment risk – These workers are W-2 that their pay and administrative management will employees of the third-party payrolling provider. This be taken care of even for short assignments. With a provides a strong, first-level wall of protection against phone call they can be utilized without delay. co-employment claims. When properly managed, this relationship virtually eliminates the worry of Since the freelancers are not on your payroll, they will not incur co-employment. Provides an easy method of pay for irregular times payroll taxes or termination costs, such as unemployment. or usage – Freelancers can be called out any time of In addition, they are not day or on short notice. In addition, they can be used eligible for your benefits No payroll, benefits or termination costs – Since for a few days here and there. A payrolling solution programs, however through the freelancers are not on your payroll, they will the payrolling company they provides an easy way to engage them without having not incur payroll taxes or termination costs, such can receive group benefits and to put them on payroll or establish a purchase order other programs provided by as unemployment. In addition, they are not eligible every time they are needed. the payrolling provider. for your benefits programs, however through the payrolling company they can receive group benefits and other programs provided by the payrolling Consolidated reporting and visibility – Keeping provider. track of a large, transient population of freelancers is challenging. Many companies have no idea how Ability to efficiently deal with different types of pay many workers they use or how much they cost. A freelancer payrolling solution can provide regular, and engagements – Freelancers often work under consolidated reporting that can include work by different types of pay arrangements. This can be a © 2014 Yoh Services LLC | A Day & Zimmermann Company p. 7 projects, productions or department/location. Administrative and on-site support – Through a payrolling provider, freelancers are taken care of through administrative support and if necessary, on-site support to ensure they have access to their employer for issues and concerns. This assures their time, work details and status is properly documented and reported, and that they are paid accurately and on time. Support for industry and location specific requirements such as California work rules – Freelancers are used heavily in the media and technology areas, where it’s a common practice to utilize a payrolling company. A payrolling provider with specific experience in a particular industry will understand the specifics of work schedules, work rules and working conditions. As such, they can tailor a custom program based on a customer’s locations, needs and industry. Flexible engagements that may include equipment or kits – It’s common in some areas for freelancers to provide their own equipment or tools of trade. A freelancer payrolling solution can include making sure freelancers are