How Bubty's Audit Prevented $1M in Fines for Multinational Agency
Introduction
A multinational agency leverages a business model heavily reliant on both employees and freelancers across various countries. As they looked to expand, concerns about potential freelancer misclassification and compliance risks became pressing, especially given the tightening regulatory environment.
The Challenge
The CEO, alarmed by the potential for significant fines due to freelancer misclassification, recognized the agency’s lack of internal compliance mechanisms. With over 100 freelancers in three countries and plans to expand further, the risk of non-compliance posed a financial threat potentially exceeding $1 million in penalties and back taxes.
The Solution
The agency engaged Bubty Services for a Compliance Readiness Audit (CRA) to assess and mitigate risks. Bubty’s team conducted thorough reviews of current recruitment, onboarding, and management practices, examining everything from job descriptions to payment processes.
Important to Know
The audit revealed significant overlaps in job roles and management practices between freelancers and employees, highlighting a critical area of misclassification risk. It also uncovered inefficiencies that reduced operational margins.
Results & Benefits
Following Bubty’s recommendations, the agency restructured freelancer roles and onboarding processes, aligning them more clearly with compliance requirements. This enabled safer business expansion and operational efficiency improvements, safeguarding against potential fines.
Conclusion
By addressing compliance proactively with Bubty’s expertise, the agency not only mitigated its risks but also positioned itself for sustainable growth. The successful audit underscores the importance of adapting freelancer management practices to comply with legal standards, ensuring both scalability and regulatory adherence.
Want to learn more about safeguarding your business against regulatory risks? Book a call with one of our compliance experts today and discover how Bubty can help you navigate the complexities of freelancer management legally and efficiently.
