Understanding Your Legal Responsibility And Potential Liability As A Client Of A Virtual Assistant Company

Let’s say you’re a senior exec who’s made the smart decision to team up with a virtual assistant agency to equip your business with remote staff.

It sounds like a seamless way to tap into global talent, doesn’t it? Plus, it’s the company’s job to ensure everything’s up to snuff legally for your new remote staff, right?

Well, not quite.

Here’s the catch: despite what your agreement with the staffing agency might say, some pretty big players like the Department of Labor, the IRS, and even the state where your remote staff lives may see things differently.

When push comes to shove, you’re on the hook for any compliance issues, worker misclassification, or unpaid FICA taxes that come to light.

This might feel like a curveball, but it’s crucial to understand why. It boils down to two main ideas:

1. Co-employment
2. Classification of Employee or Independent Contractor

Remember a few years back, when ride-hailing giant Uber faced a legal storm due to driver misclassification? It wasn’t pretty — and it cost them an $8.4 million settlement. Fortunately, it’s something we can all learn from to ensure our businesses stay on the right side of the law.

So, let’s dig deeper to clarify these concepts and help you navigate these potentially choppy waters.

How Co-Employment Works And Your Legal Responsibilities

When you partner with a top-rated virtual assistant company, they’ll pair you with a remote staff member who has the right experience, skillset, and chemistry.

You’re off to a great start.

But, from this moment on, you’re stepping into what’s called a co-employment situation.

This happens quite naturally, even if it’s not written down in black and white.

Here’s how it works: The staffing agency handles the paychecks for your remote staff while you take on the role of the boss, guiding your remote worker through their daily tasks and objectives.

This means both you and the staffing agency share legal responsibility for keeping things to federal and state legal standards. However, if any compliance issues were to arise, you—yes, you, the one managing the remote worker’s day-to-day tasks—would typically be the first to be held accountable as the primary employer.

Think of it like a football team—just because the coach didn’t fumble the ball doesn’t mean they won’t face scrutiny if the team loses. Similarly, you need to ensure that every play made in your remote team’s playbook aligns with legal guidelines, even if you’re not the one paying the salaries.

Next, let’s look at how the government classifies your remote roster.

Understanding Employee Classification In Remote Staffing

In the United States, different government agencies and states use various methods to determine whether a worker is an employee or an independent contractor. While there might be some variations, most of these methods revolve around three central themes:

1. The worker operates independently, without any control or supervision in delivering their services.
2. The services aren’t continuous or long-term.
3. The work falls outside the regular operations of your business.

Now, let’s consider your remote staff, like virtual assistants, marketing assistants, or bookkeepers. They’re working for you regularly, you’re guiding their work, and their tasks are part of your business activities. So, without any shadow of a doubt, your staff, like remote executive assistants, are employees in the eyes of the law.

Read more: Hiring A Remote Executive Assistant? Here’s Why A W2 Is The Right Move Every Time

You might be wondering: Should this deter me from working with remote staff contracted through a staffing or virtual assistant company?

Well, not at all—as long as the company you’re partnering with is ticking all the legal boxes for you. There’s no reason why you shouldn’t continue to benefit from the immense talent pool that remote work brings to the table.

Ensuring Compliance And Long-Term Peace of Mind

Most virtual assistant companies onboard their assistants as independent contractors, not employees.

Before selecting a vendor, do your homework. Ask the specific questions about co-employment, compliance, and legal responsibilities—especially if you’re in California.

Make sure their team members are W2 employees and that all employment requirements—like paid leave, workers’ compensation insurance, overtime, and more—are being met. If these conditions aren’t fulfilled, you could be opening yourself up to the risk of non-compliance.

This could lead to potential personal liability for worker misclassification, including hefty fines, back taxes, and other complications.

To stay on the safe side, request documented proof from your staffing or virtual assistant company that their US team members are indeed W2 employees.

Here at Boldly, we’ve got you covered.

Premium subscription staffing ensures complete legal compliance, taking the burden off your shoulders. Plus, our team’s job satisfaction guarantees a long-term commitment to your remote staffing needs. With Boldly, you can rest easy knowing we’ve taken care of everything, so you don’t have to.