What is a Workforce Compliance?

Penalties vary by jurisdiction but typically include: back employment taxes (Social Security, Medicare, unemployment), interest and penalties (often 40-50% of unpaid amounts), unpaid benefits (healthcare, retirement, leave), overtime back-pay, and potential class action liability if multiple workers are affected. Criminal penalties may apply in cases of willful misclassification.

There's no universal test, but key questions include: Do you control how the work is done (not just what)? Does the worker work only for you? Do you provide equipment and set hours? Is this an indefinite relationship? If you answer "yes" to most of these, employee classification may be required. When uncertain, get legal advice or use structures (like EOR) that eliminate the risk.

An Employer of Record is a third party that legally employs workers on your behalf. The EOR handles all employment compliance — contracts, taxes, benefits, termination — while you direct the work. EORs are particularly useful for international hiring where setting up local entities isn't practical. WorkGenius offers EOR services as part of our platform.

Constantly. Labor laws, tax rules, and classification standards evolve at federal, state/provincial, and local levels. The US has seen significant state-level activity (California AB5, similar bills elsewhere). Internationally, the EU and individual countries regularly update worker protections. This is why ongoing compliance monitoring — not just initial setup — is essential.