Afoul of Independent Contractor Rules: Training #2

In my last post I tricked you -but it was for a good reason! 

I started with a seemingly simple  common scenario where workers required training delivered by your organization. This scenario was used to illustrate how rules affecting independent contractors are not as clear as you would want them to be.  The rule seemed to say that if you train workers in any way, they are employees and cannot be classified as independent contractors. That could be a problem. 

Perhaps not always, however. It would seem that there is training that independent contractors should complete that doesn't really control their behavior, only explains how to get work done in your organization. A couple of examples are: 

• Training regarding policies on preserving personal information of customers. This type of training would be different at different organizations and independent contractors could always expect to adjust their procedures to accommodate different customers. 
• Training about security badges and building security. Different organizations have different security policies and training on these details should not interfere with an independent contractor being independent. 

In this IRS guidance document under "All of the following are examples of types of instructions about how to do work." you will find the following bullet:  "What order or sequence to follow."  That means that, if you tell workers the steps to do their work, you keep them from being independent contractors. 

This seems to put you in a bind. There are many types of training where you lay out specific  steps for workers, For example, training on system development life cycle or project management process. For many organizations, the processes and procedures associated with these activities are pretty detailed and specific. An independent contractor being required to go through this training and following these rules will look very much like an employee. Very much.  

Here's another listed training topic that is for employees only: Training covering corporate strategy or IT organizational goals. Yet, your organization may desire to have independent contractors attend training of this type to ensure they are aligned properly.      

Giving independent contractors either of the above training types can be used by regulators (or in court) as evidence that your organization is misclassifying employees. Very bad. Yet training must occur on certain portfolio management processes such as tollgates where deliverables are submitted for review. Likewise you would expect contractors to create your organizationally-required deliverables - but on their own time and using their own expertise as independent contractors would be expected to.  

Consider this a risk to be managed. Involve legal, compliance and procurement experts. Industry standards have not been clarified at this time and your organization has to be protected. 

Remember this series will continue intermittently to help you remain aware of pitfalls in managing independent contractors.