Tag Archives: Compliance

Product update: View and manage masters and subcontractors with more flexibility

As the independent workforce economy continues to grow, more and more independent contractors are enlisting other contractors to help them expand the volume and scope of the work they can take on. This is frequently called the master contractor/subcontractor model.

Though this allows contracting companies to distribute additional work to master contractors, the visibility into the subcontractors who are doing the work for the master is often elusive.

Contracting companies are struggling to find the balance between keeping themselves separated from the specific details of every subcontractor, while also feeling reassured the people doing the work are properly qualified and insured.

Openforce is in the midst of a major initiative to bring you a set of features that will allow you to better control the level of visibility and validations that you require of subcontractors doing work for you. We’ve built on the recent updates we told you about here, to offer you more flexibility to visualize—or not—the relationships between masters and subs.

Keep tabs on who’s doing what by assigning a contract role

In May, we rolled out the ability to quickly designate a contractor according to their contract type; now you also have the ability to associate a contractor with a specific role—driver, helper or installer.

From the Contractors’ tab, you can click Assign Contract Role/Type. Here you can get a complete list of all contracted ICs and their roles and types. To associate a contractor with a role, select the relevant role from the Contract Role dropdown.

You can set the role for any IC, not just a master or subcontractor so you can more clearly track and represent the function of each IC, which is especially useful if those roles are associated with different pay rates.

If you do use masters and subcontractors, the beauty of this is you’ll be able keep a high-level record of the kind of work each subcontractor is doing and reference it at a glance whenever you need to.

Associate a subcontractor to a master in 1 click (ok, 2 clicks)

When a master invites a subcontractor to an enrollment, the subcontractor is automatically assigned to that master within the Openforce platform. But what if your business sent the enrollment invitation to the sub?

Now you can quickly associate those subs with a master by navigating to the Contractors tab and clicking on the new Unassigned Sub Dashboard. The dashboard lets you know the number of contracted subs who are not tied to a master in Openforce. Once you click through, use the Assign Subcontractor To dropdown to select the name of the relevant master.

You’ll have a clean record of the relationship in seconds.

View all the subcontractors associated with a master

Along with the ability to designate the relationship between a master and a subcontractor, we’ve enabled you to see at a glance all of the subs performing work for each master. From the Contractors tab, click on Assign Contract Role/Type. Click on the arrow to the left of each master’s name to see a list of the associated subcontractors and their roles.

Choose whether or not you see enrolled subcontractors in Openforce

One of the strengths of the master/subcontractor model is that it reinforces the independent status of the ICs performing work. This helps reduce any lurking worker misclassification or third-party liability risks.

Depending on your business needs, you may want to have a lot of visibility into the subcontractors completing work for a particular master. The new tools above enable you to do just that.

However, if reinforcing an arm’s length relationship to subcontractors is a concern, you now have the option to remove visibility of subcontractors from your Openforce contractor grid. When you opt for this, the record of the subcontractor is still stored in Openforce along with their completed enrollment workflows and documents, but you will no longer see them when logged into Openforce.

This works best when paired with our optional managed onboarding service, so that an Openforce onboard coordinator can approve and disprove subcontractor enrollments and ensure your compliance requirements are met. This balances the need for subcontractors to meet your specified criteria while further distancing your business from the active oversight of subcontractors.

Turning off subcontractor visibility is a quick configuration change on our end, so if you’re interested in learning more, get in touch at clientcare@oforce.com or 1.800.742.7508.

Stay tuned as over the next few months we’ll continue to add new features to make managing masters and subcontractors work for the way you work.


Why you can’t ignore AB5—and what it means for the future of independent contractors

In April 2018, the California Supreme Court made a landmark decision in Dynamex Operations West, Inc. v. Superior Court of Los Angeles that set a new, far more restrictive standard—the ABC test—for determining whether a worker is an employee or an independent contractor.

And in a state known for aftershocks, the Dynamex decision has certainly sent its fair share roiling through the worker classification landscape. The case itself involved the job status of delivery drivers, but because the ABC standard in the ruling makes it far more difficult to classify a worker as an independent contractor, the decision has the potential to have a massive impact on the gig economy and any industry that relies on an independent workforce.

Cue a fair bit of panic and uncertainty. Since the decision was limited to Wage Orders and since no legislation was in place to define the ABC Test’s future application, it left major question marks over the possibilities of the courts applying the standard retroactively or in other contexts, like workers’ compensations cases.

Assembly Bill 5 (AB5) seeks to codify into law the ABC Test as the new standard for independent contractor (IC) misclassification in California. This would effectively rewrite the rules of the independent economy and on May 29, 2019, it passed the State Assembly and is set to be voted on by the State Senate in September.

All signs point to the bill passing and since variants of the ABC test are already in play in other states, taking a close look now at how your workforce (both in and outside of CA) fairs) in relation to the ABC Test is a smart move.

An ABC Refresher

If you live and breathe compliance, you may already be lying awake at night reciting the prongs of the ABC Test; but if not, let’s recap. Under the ABC test a worker is presumed an employee—not an independent contractor—unless they meet all 3 of the following criteria:

  • (A) The worker is free from control and direction of the hiring entity in connection with the performance of the work, both in contract and in fact.
  • (B) The worker performs work that is outside the usual course of the hiring entity’s business.
  • (C) The worker is customarily engaged in an independently established trade, occupation, or business of the same nature as the work performed for the hiring entity.

Prior to Dynamex and the ABC Test, the standard for determining IC status in California was the Borello test, the primary factor of which is whether “the person to whom service is rendered has the right to control the manner and means of accomplishing the result desired.”

Exemptions? Maybe, maybe not

If AB5 becomes law, certain industries may be exempt from the ABC Test. As currently written the only exemptions include lawyers, doctors, dentists, hairstylists, accountants, insurance agents, engineers, real estate agents, financial advisers, and some health care workers.

However, before the September vote by the State Senate, the California Chamber of Commerce and dozens of industry groups are lobbying hard to make additional industries exempt—especially the transportation industry. These efforts may mean that the bill could still be amended before the Senate hears the bill.

Before banking on additional exemptions though, it’s important to note that just because a worker may be in an industry or profession that is exempt from AB5, it does not mean that they would automatically be assumed to be independent contractors. It only means that their status in a worker misclassification claim would be evaluated based on the Borello standard.

Broad application could be the new norm

As currently written, AB5 indicates a broader application of the ABC Test in 3 ways:

  • In California, the ABC Test would be applied not just to Wage Orders, but to all the provisions of the Labor Code and Unemployment Insurance Code as well. (And the legislature plans to determine whether it would be the test for the Workers’ Compensation and Insurance Code at a later date.)
  • The current iteration of AB5 would make it possible for the ABC Test to be applied retroactively, meaning that businesses could face major financial penalties for misclassifying workers years before the Dynamex decision and the adoption of the ABC Test.
  • Because California has the largest state economy in the US, its laws and lawmakers have significant sway in national politics. That combined with the notoriety of the Dynamex decision, makes it all the more likely that if AB5 passes, other states may follow suit and expand their adoption of the ABC Test. And if “as California goes, so goes the nation” reigns then it opens the door to nationwide affects for independent contractor–heavy industries.

Get your compliance ducks in a row

So what does it all mean? Despite the likelihood of AB5 passing, businesses with independent contractors don’t need to despair just yet. Now’s the time to take a good hard look at your current IC practices across the board and make corrections sooner rather than later.

While we can’t claim to solve California, our compliance-loving advisors here at Openforce have been refining our recommended processes with additional measures to help businesses proactively reduce the risk of a misclassification claim in other parts of the country.

Feel like you need a risk check-up? Get in touch here.


Best-Practice Insurance Needs for 1099 Contingent Workforces

The rise of the on-demand economy, part of a broader long-term growth trend in the contingent workforce, is expected to reach 43 percent by 2020. This means millions of new independent contractors operating as independent businesses will be required to have some type of business insurance. Some coverages are mandated by the companies they contract with, some mandated by upstream contracting companies, some manadated by law, and yet others simply advisable from a business/personal protection viewpoint.

Whether you already run an independent business, are thinking about becoming a 1099 contractor, or own a company that works with independent contractors—the information that follows will help you understand the types of insurance coverages that both companies and contractors should have in place to operate in a best-practice protected manner.


If you own a company that regularly deploys 1099 contractors, industry best practices may suggest that those contractors procure and maintain at least some form of the commercial insurance coverage described below, in place for any services they provide to, or on behalf of your organization. The IC coverages many times work together with your own coverages to provide multiple layers of protection.

The Workers’ Compensation Triad

One of the most complex areas of insurance for contingent workforces involves the triad of coverages related to Workers’ Compensation and Occupational Accident. These twin coverages, and the related Contingent Liability coverage, all operate together to provide accidental injury coverage to employees and independent contractors—and to ensure that each worker type is routed to the correct coverage.  Workers’ Compensation provides wage replacement and medical benefits to hired employees whereas Occupational Accident Insurance provides similar benefits, but to independent contractors and their own subcontractors.

Keep in mind that there are other insurance policies that may be required and requirements vary from industry to industry.

Workers’ Compensation

Workers’ Compensation insurance is a legal requirement in most states if you have one or more employees. But, what about independent contractors?

If you’re an independent contractor with no employees, you are generally not legally required to carry Workers’ Comp for yourself. However, there are exceptions depending on the state or type of business industry you provided services for.

If you’re contracting company, it is important to ensure that independent contractors purchase their own accidental injury insurance—and for independent contractors this coverage many times is supplied in the form of Occupational Accident coverage (see below). This coverage will respond to pay any medical bills, disability payments, injuries or wage replacement they sustain or require while providing a client with their services.

Some companies opt to cover independent contractors within their own Workers’ Comp policy. However, if you operate a business in an industry where the likelihood of injury to contractors is high (logistics, construction, manufacturing), you likely want to avoid including contractors on your company’s policy as their claims can adversely affect your rate for years.  In addition, coverage of ICs with your own employee Workers’ Comp coverages may cause confusion, leading to misclassification claims (ICs claiming employee status).

Occupational Accident

Occupational Accident insurance helps to cover independent contractors who are injured while under contract for a specific job. This type of coverage can help pay for medical bills, death benefits and replace certain lost wages. Businesses that enable Occupational Accident insurance coverages for ICs can protect themselves from expensive and time-consuming claims by independent contractors seeking employee benefits under the company’s Workers Comp policy. Limits in coverage allow organizations to manage costs and independent contractors can have peace of mind that they are protected.

Notably, while contracting companies may help enable procurement of Occupational Accident coverage, it is typically the independent contractor and related subcontractors that opt into such coverages and pay the related premiums. Keeping track of such coverages for all independent contractors in a contingent workforce, payment of premiums and cancellations can be a major challenge for companies wanting to ensure that all working ICs maintain Occupational Accident coverage. Furthermore, contracting companies typically would not want to be in the business of providing or managing such insurance coverages—once again risking misclassification claims.

Contingent Liability

Contingent Liability insurance protects a contracting company should an independent contractor claim to be an employee and sue to be covered under the company’s workers comp policy. Contingent Liability insurance pays for reimbursements should the ‘worker’ win his or her settlement and for court costs the contracting company incurs, providing a shield against the company’s Workers Comp policy even in the event of such a “loss”.

While a contracting company may see benefits from selecting Occupational Accident insurance over Workers’ Compensation, there are several risks involved with relying on minimum coverage alone. An independent contractor may get into an accident and claim to be an employee of the company in an attempt to collect Workers’ Compensation benefits. Even though the company reimburses the contractor in the form of Occupational Accident benefits, it may not cover all the medical expenses to the same extent as Workers’ Comp coverage. As a result, the independent contractor may insist on the larger payment that Workers’ Comp provides. Companies utilizing a high number or percentage of independent contractors should consult with counsel to ensure that reasonable limits are set for required Occupational Accident coverage.


Through our decades of experience and network of trusted insurance partners, we help you reduce your IC misclassification risks and access affordable coverage for you and your independent contractors—so you’re both protected. We also help contracting companies and their insurers fully manage occupational accident enrollment, premium payment and coverage maintenance. Because an independent third party is administering these processes, contracting companies can further distance themselves from potential employer action perceptions.

At Openforce, we’ve made it simple, fast and affordable for businesses and independent contractors to purchase coverages through partner-broker programs and manage the insurance coverages they need to be effective through:

  • Affordable Occupational Accident, Contingent Liability and Workers’ Comp options
  • Insurer-broker agnostic programs and ability to connect to multiple insurance partner options
  • Openforce’s 1099 platform helps ensure every ICs coverage is in place, verified and maintained
  • Settlement deductions simplify payment and maintains ongoing coverage

Furthermore, we help properly validate and track the coverage for independent contractors, which is critical for compliance. Companies should always keep updated certificates of insurance, or proof of insurance, on file to confirm that the contractors not only have coverage in place, but that they haven’t missed payments which can cause the insurance to lapse.

Learn more about our insurance enablement solutions and other powerful independent contractor management platform features that help our customers onboard, manage, pay and retain their 1099 workforce.


We Just Made Onboarding Drivers Faster & Hassle-Free

Even for clients using Openforce’s complete mobile onboarding platform, enrollment workflows related to pre-screening, background screens documentation, and authorizations can create a heavy, time-consuming burden for carrier relations administrators.

It’s inevitable that in any onboarding process, there will be delays from third parties and even the ICs themselves. As a result, administrators get caught in the cycle of chasing down information, making calls, and holding all parties accountable to deadlines.

Furthermore, when there are delays in the process, most organizations say it’s because they don’t know the status of the onboarding process and cannot be timely with their follow up.

That’s why Openforce’s Fast Onboard Service was created. We assign an administrator who takes on and expedites the onboarding process while providing clients with visibility into all contractors’ status along the way.


With a dedicated Onboarding Team acting as an extension of your department, we can ensure that qualified contractors are onboarded quickly through the Openforce platform faster than clients can typically achieve themselves. Here’s why:

The Fast Onboarding Team is:

  • Knowledgeable on the Openforce system.
  • Fully versed in the Client’s process, requirements, business and people.
  • Dedicated to onboard management only; no distractions or other duties.
  • Able to run overtime with 48-hour advanced notice for urgent needs.


In a recent benchmarking study, an Openforce Onboarding Coordinator dramatically reduced cycle times and durations for the following:

Openforce’s Fast Onboarding Team helps meet the onboarding and compliance demands of your approved business process, supporting the following:

Additionally, the Onboarding Team will benchmark current enrollment durations that will be used to identify and improve bottlenecks across the entire process, so that clients can see their actual results.

With Openforce’s Fast Onboard Service, companies are able to transfer the burdens of inefficiencies, wasted time, and cost to us.

Learn how Fast Onboard Service with complete mobile enrollments provides your company with faster access to enrolled drivers.

Contact us today


Openforce Awarded SSAE 18

Today, Openforce announced the completion of a third-party audit report demonstrating full compliance with SSAE 18. The successful audit affirms Openforce’s policies and practices for managing the company’s risk and protection controls along with those of their sub-services providers.

Committed to the utmost levels of integrity and customer satisfaction in same-day courier, trucking, final mile, home care, and other verticals, Openforce’s IC Onboard, IC Pay, IC Complete, and its integrated data analytics platform, IC Insight are managed to the highest standards.

Established for advanced IT service providers, the American Institute of Certified Public Accountants (AICPA) Service Organization Controls (SOC) 1 Type II certification provides Openforce customers with an independent auditor’s unbiased level of assurance of corporate controls as it relates to network and logical security, processing integrity, availability, confidentiality, and privacy.

“The SSAE 18 report serves as a continued endorsement of our market leadership in financial processes and controls for independent contractor management software,” said Drake Pruitt, CEO of Openforce. “Openforce is committed to following security and compliance standards that allow our customers to have the proper assurances in the integrity of our systems and processes, along with those of our suppliers.” 

Designed to bring all U.S. standards up to international standards of security compliance, the new requirements set by these regulations are best practices that Openforce has been adhering to for the past six consecutive years.

Four SSAE 18 changes that affect the SOC 1 examination:

  1. Vendor Management
    The most significant change in the requirements that must be met by a service organization is ensuring that its vendor management program for sub-service providers is significantly robust, which monitor the controls at sub-service organizations.
  2. Risk Assessment
    SSAE 18 requires service auditors to obtain a more in-depth understanding of the development of the subject matter than currently required, to better identify the risks of material misstatement in an examination engagement. The goal is to have an improved linkage between assessed risks and the nature, timing, and extent of attestation procedures performed in response to those risks.
  3. Complementary Sub-service Organization Controls
    As more organizations are outsourcing key functions to their own set of subservice organizations, SSAE 18 introduces the concept of “Complementary Subservice Organization” controls. This concept establishes and defines the controls for which user entities must now assume in the design of the system description. SSAE 18 provides more guidance around this area for more consistent reporting across entities and practitioners.
  4. Written Assertion Requirement
    The final change to the SOC 1, per SSAE 18, is that the service auditor obtains a written assertion. This written assertion is the statement found within the SOC report wherein the service organization asserts that the system description provided is essentially true and complete. This statement has always been contained within the SOC 1 reporting document but the requirement that the service organization signs the document was optional.

Today’s on-demand economy is driven by technology that automates processes and transactions to meet the increasing consumer demands for lower cost, high transparency, rapid delivery of goods and services. To meet the challenge, suppliers like Openforce must earn and protect the trust of their customers and supply chain partners. Compliance with audit standards like SSAE 18 are integral to demonstrating that commitment.

“When it comes to proper management of sensitive data related to compliance monitoring, risk management and settlement processing, our customers have complete peace of mind that Openforce has controls and practices in place to ensure the safeguarding of their data,” added Pruitt.

Understanding Your Business License Needs

Traditional work is changing. People want more control over their schedules, flexible working conditions, and to be their own boss. But being your own boss and business owner comes with its own unique set of challenges and unknowns—like whether you need to apply for a business license.

What is a Business License?

A business license allows you to conduct business in a specific city or municipality. Each city and town in the U.S. is different, and their requirements vary as to who must get a business license and how much the license costs. Failure to understand the licensing rules where your business is located can result in serious consequences.

Why do I Need a Business License?

Licenses are required for three main purposes:

  • To identify your business and make sure you are accountable for your actions
  • To protect the public health and safety
  • To keep track of your finances for tax purposes

Much like how incorporating may keep your business (and you) from losing personal assets in the event of a lawsuit, a license provides protection in the event that your business is damaged or if any of your team suffer from an injury. Without the license, you are the one who is held liable, along with your assets and personal finances. Fortunately, getting a business license is neither very expensive, nor time consuming, if you know where to start.

How do I Get Started?

If you’re already up to speed on your business license needs and prefer to secure them yourself, go to Business.USA.Gov. But knowing what you need can be a little tricky—that’s why we provide the resources to help guide our members in the right direction.

As an Openforce member, we offer the resources for business success:

  1. Log into your Member Benefits in your self-service online portal and click on the ‘Business’ tab
  2. Select the ‘Business Licenses’ icon to get started


This is just one of the many business resources and benefits we provide Openforce members. Let the experts do the paperwork for you, so you can focus on the other more important aspects of getting your business up and running. Ultimately, saving valuable time and having peace of mind that you’ve filled out the proper paperwork is worth the minor expense.

New Rules on NYC Freelance Isn’t Free Act

As shared in our previous blog post, also known as Local Law 140 of 2016, the Freelance Isn’t Free Act enhances and establishes protections for independent contractors by creating and protecting their right to protection from retaliation, full and timely payments, and a written contract.

Final Rules Implementing the Act

The NYC Department of Consumer Affairs has since published final rules implementing the Act. With the final rules taking effect soon, it’s important to understand what’s new.

The related legal blog highlights the following final rules, including:

  • The text of the Act states that it applies to “hiring parties,” defined as “any person who retains a freelance worker to provide any service” (with the exception of government entities). The rules expand upon the coverage of the Act to now apply to actions taken by “a hiring party, their actual or apparent agent, or any other person acting directly or indirectly on behalf of a hiring party.”
  • The rules place significant limitations on the terms and conditions that may be included in a contract entered into between a freelance worker and a hiring party. Specifically, any such agreement may not include:
    • A prospective waiver or limitation of rights under the Act,
    • A waiver or limitation on the right of the freelance worker to participate in or receive any relief (monetary or otherwise) from a class or collective action lawsuit or proceeding,
    • A waiver of “any other procedural right normally afforded to a part in a civil or administrative action” (such as procedural rights under the federal or state rules of evidence or civil procedure), and
    • Confidentiality provisions that restrict a freelance worker’s ability to disclose the terms of the agreement to the Director of the NYC Office of Labor Standards. 
  • Under the Act, covered entities may not retaliate against freelance workers for exercising or attempting to exercise their rights under the law. The rules further define what constitutes an adverse action in violation of the anti-retaliation provisions of the Act, namely: “any action… that would constitute a threat, intimidation, discipline, harassment, denial of a work opportunity, or discrimination, or any other act that penalizes a freelance worker for, or is reasonably likely to deter a freelance worker from, exercising or attempting to exercise any right” guaranteed under the Act.
  • The rules further state that retaliation “may be established when a freelance worker shows that the exercise or attempt to exercise any right under the [Act] was a motivating factor for an adverse action, even if other factors also motivated the adverse action.” Thus, the final rules establish a motivating factor causation standard for claims of retaliation, as opposed to a “but-for” standard where retaliation would need to be the sole factor underlying the reason for the adverse action taken.
  • The rules clarify that freelance workers are entitled to the protections of the Act “regardless of immigration status” and that prohibited retaliation includes “any adverse action relating to perceived immigration status or work authorization.”
  • For purposes of defining the value of a contract between a freelance worker and a hiring party (both to establish coverage under the Act and to calculate statutory damages for violations of the Act), the rules state that such value includes “the reasonable value of all services performed and/or anticipated, and the reasonable costs for supplies and other expenses reasonably incurred by the freelance worker.”

We will continue to share updates to the act. In the meantime, any client doing business in NYC, or utilizing the services of a contractor who lives in NYC, should consult with legal counsel to ensure they are operating within the confines of the new law.

Technology Drives Savvy Home Care Agencies to Succeed

A good place to start is with a backend technology solution. The best platforms offer built-in independent care model infrastructure that helps navigate specific challenges and mitigate risk. At the same time, using technology solutions can reduce operating costs and help match service capacity with patient needs.

Modernizing Operations to Meet Internal & External Demands

Following are three ways technology-driven solutions can help you streamline both operational and compliance practices:

1. Prescreen Independent Caregivers
Posting vacancies on recruitment sites, manually reviewing each candidate, and evaluating qualifications is a cumbersome process that leaves many agencies struggling to move independent caregivers through this process and into the field. By implementing an automated prescreening process, organizations can leverage various compliance workflows according to certifications, locations, and a variety of other screening services to expedite the vetting process. This helps ensure that caregivers are compliant and qualified to provide services prior to allocating valued time and resources to move them to onboarding.

2. Navigate Negotiations
Treating independent caregivers as an extension of the agency rather than as a separate business entity can lead to costly compliance violations. Recording the negotiation process prevents exploitation of either entity and minimizes potential compliance issues. Leveraging software with an interactive negotiation platform provides a neutral landscape to digitally capture the negotiation interaction. If the negotiating parties establish a deal or contract using this type of solution, the agreement is documented with clearly established terms that are acceptable for each of the negotiating parties.

3. Establish an Audit Trail
Regulations, labor laws, litigation and audits are constantly in the media. As such, providers need to ensure the defensibility of their compliance strategies. Clear implementation of best practices and documentation of those practices are essential components to withstand regulatory scrutiny. Having a complete end-to-end audit trail tracking the entire independent caregiver interaction lifecycle can seem like an arduous process. But with caregiver management software, agencies can digitally track necessary interactions to provide supporting evidence of its compliance plan and limit vulnerabilities.

Overall, leveraging technology allows agencies to take a proactive approach. Additionally, implementing a tailored solution to ensure your best practices are consistently followed through custom-built workflows helps you work smarter, reduce risk, and streamline operations.

See it in Action with Mosaic
Read how a modern technology platform enabled Mosaic to migrate more than 600 host home independent caregivers across 36 agencies in 10 states into a new, automated system, allowing them to better respond, grow and succeed in home care.

Download the Whitepaper