The Challenge: Navigating the Complexity of Varying State Laws in the U.S.
A UK-based talent agency with a strong reputation in Europe sought to expand into the lucrative U.S. market. But despite the firm’s success abroad, its U.S. expansion hit a roadblock: The complex and sometimes inconsistent employment laws across U.S. states – particularly concerning worker classification and tax compliance – proved difficult to navigate.
The firm’s employees did not have the expertise or bandwidth to learn the intricacies and nuances of state-by-state compliance regulations, payrolling requirements, and onboarding talent in multiple states. This made it even more challenging to manage the additional administrative burden of expanding into a new, highly regulated market.
The agency was also concerned about the potential legal and financial repercussions of misclassifying workers, which could lead to crippling penalties and damage its reputation. The company needed a partner with deep expertise in U.S. employment practices to ensure compliance and pave the way for a smooth entry into this new market.
The Solution: Full-Service Compliance and Back Office Support
After considering various HR service providers, the company selected Innovative Employee Solutions (IES) and its Recruiter Service program. “We were looking for proven leadership and expertise servicing all 50 states,” said a company representative. “We chose IES because we were committed to expanding into the U.S. safely and intelligently. We weren’t about to leave anything to chance.”
IES provided tailored back-office support and fully managed multi-state compliance for the client. IES ensured that all the client’s recruited workers – whether W-2 employees or 1099 ICs – were classified properly and managed in accordance with state and Federal laws. This mitigated misclassification, co-employment, and other legal risks.
IES’s support didn’t stop there. By providing end-to-end Employer of Record (EOR) and Agent of Record (AOR) services to the client’s recruited talent, IES ensured the ideal engagement solution for every worker. That meant fully compliant engagements, seamless payment processing, access to ACA-compliant benefits (for employees), and of course IES’s hallmark: friendly and effective day-to-day support. Further, IES handled all invoicing and collections from the company’s end clients, ensuring a seamless and reliable cash flow.
The Results: IES Opened the Door to New Revenue Streams
With IES managing compliance and administrative tasks, the consultancy successfully entered the U.S. market, establishing relationships with new clients who had been previously out of reach. In doing so, IES helped the client:
Minimized Risk
IES’s expertise in state-by-state employment laws across the U.S. significantly reduced the risk of worker misclassification and other legal pitfalls, providing the client with long-term peace of mind.
Improved Operational Efficiency
By outsourcing back-office functions to IES, the firm was able to scale operations efficiently without overburdening its internal teams, enabling it to focus on pursuing new clients and delivering superior services.
Enhanced Revenue Streams
IES’s support made it possible for the client to substantially increase its revenues by expanding its service offerings to include both W-2 and 1099 placements.
IES’s Recruiter Service program proved to be the key enabler for the client’s successful expansion in a challenging market. “By partnering with IES, we were able to confidently navigate the complexities of the U.S. employment market,” the representative continued. “We reduced operational risks, streamlined our workflows, and reduced the administrative burdens on our team. Our significant growth is a direct testament to IES’s expertise and support.”
