Welcome to my first-ever newsletter: ‘The Compliance Capsule’’ I am quite excited to get this going and am very thankful for your interest and subscription.

Every Wednesday, I will share regulatory news from the US and around the world, classification criteria insights and practical advice to drive compliant operations and management practices.

And despite the compliance topic, I will also try to have a little fun along the way. 

To get things started, a bit of history on how a unique compliance factor (employee classification) has and continues to shape the freelance category management strategy…

The Origins of Freelancer Spend Management (My Take)

Freelance talent engagements used to be known as “IC SOW,” referring to the statement of work that is used (or at least should be used!) to engage independent contractors.

Ok, maybe that was just me calling it IC SOW. By that time in my career (the 2012 timeframe), due to the zealousness of my SOW passion, I had been dubbed SOW Geek by my leadership team at IQNavigator (now Beeline, a vendor management system or VMS).

I set up IQN’s SOW practice in 2012 after 12 years of sourcing, contracting, and managing SOW deals in my role as the inaugural services procurement category leader for Capital One and then doing the same at a well known hedge fund in Connecticut, one that shall go unnamed. ;) 

SOW was my life! (My work life for those worried I might be placing SOW ahead of my personal life which has been blessed by a LOML wife of 37 years and two wonderful daughters.)

While at Capital One I designed, helped develop and most importantly used one of the industry’s first SOW solutions built into a VMS (PeopleSoft’s S-Pro).

My team and I used the new fit-for-purpose workflow technology to manage over 400 annual SOWs and nearly a billion dollars of professional services spend.

We benefited greatly from the operational efficiencies and much greater contract compliance the new technology afforded.

But also the newfound access to SOW spend data that helped evolve industry-wide spend management practices in the services procurement segment.

There was not much I focused on at that time if it did not connect back to sourcing, managing, contracting, or analyzing SOW spend in some way. I was hooked. 

The Transition From Managing IC SOW to More Holistic Freelancer Spend Management

It happened in 2015 when my newly formed Sourcing for Services company was partnering with GRI (a managed service provider that spun off from IQNavigator) and was awarded program management of Oracle’s IT SOW spend.

We became an extension of their procurement team. And before long we noticed that a fair number of the IT SOW engagements were with individuals, sole proprietors - not uncommon prior to the Dynamex Operations West, Inc. v. Superior Court decision in 2018 and the resulting California AB5 legislation that went into effect in 2020 and is still influencing classification criteria in 2025 (more on that regulatory earthquake in a later issue of this newsletter).

Recognizing that due diligence and contracting for freelance individuals was quite different from that applied to IT consulting firms and established vendors, my business partner and I launched a new business called IC Precheck, solely dedicated to IC classification screening and agent of record services.

And while our startup was not selected to run Oracle’s compliance, we were very thankful to the team there for providing us their feedback and enabling the launching pad for a new business, and as it turns out a new passion for me. 

I am happy and proud to report that IC Precheck (and its successors) did go on to manage a number of accounts and thousands of freelancers.

The business and service delivery approach I adapted, that I have brought forward to the AOR services model I provide through Bubty today, has been heavily influenced by my time in the procurement function at the fine organizations noted above.

Managing freelancers isn’t just about managing the compliance (although that’s the piece I really enjoy), its about enabling and leveraging scalable access to talent via talent pools, its about understanding how to leverage freelance talent within the broader contingent labor strategy the organization has in play, and its about the operational capabilities that allow a company to scale their engagement of freelance talent across the skills spectrum, the various regulatory hurdles, and across the global geography.

In short, managing freelancer spend was significantly more involved and nuanced than managing SOW engagements that happen to be with freelancers. With that lesson learned, I shifted gears.

Managing Employee Misclassification Risk Is More Than Conducting a Compliance Survey

From my admittedly SOW-centric viewpoint, the realization that IC SOWs required materially different engagement and management practices than Corp-to-corp SOWs, was critical in my development of and appreciation for the intricacies of freelance compliance and management.

Most notably, employee classification screening, master service agreement (MSA) templates tailored to IC engagements, and statements of work that are, as I affectionately refer to them today, “IC Ready” SOWs.

How IC SOWs are written provide the framework for the whole engagement.

Why is that important?

Because it is not simply the worker that needs to align with the governments’ IC criteria (1099 in the US, IR35 in the UK, DBA Employment Law in the Netherlands, etc.), but the entire engagement.

An easy example is this: an individual freelancer can meet all the classification criteria her/his state and the federal governmental agencies require with regard to how they form, register, manage their business, maintain their own insurances, have documented evidence of adherence to self-employment tax filing, market their business and have obtained multiple clients, etc, etc, etc.

But, if the assignment they go into at the client company is managed more like an employee job role - required to attend staff meetings, asked to provide daily status updates, uses client-provided equipment, works a regular schedule in the client offices alongside employees, etc, etc, etc - then the IC classification will in all likelihood fail.

The classification follows the engagement, not the worker. The importance of this fact means that the client company practices, along with hiring manager behaviors, typically expose the company to more risk than the contractors themselves.

That’s why Bubty Compliance Services looks at the entirety of the freelancer engagement life cycle to manage our customers’ misclassification risk and not just conduct a contractor screening at a point in time before the engagement starts.

What to Expect Going Forward

I wanted to share this personal introduction with you not only so you know my experience and my passion, but so you get a sense of how misclassification risk can be difficult to identify and even more challenging to compliantly manage.

It is my goal with the Compliance Capsule newsletter to dig a layer deeper on judicial findings and agency rulings and to make the connection to IC screening procedures and management practices.

Each newsletter will give brief updates where they are warranted but will also tackle a particular topic in greater detail based on my experiences managing contingent labor on the buy side and developing and implementing solutions from the sell side. 

 If you prefer a different way to stay updated, I invite you to check out, The Future of Compliance Podcast. Twice monthly I interview freelance compliance professionals and interested parties in order to bring you and our industry the different voices that are shaping and guiding, innovating and developing, the future of freelance compliance in the US and globally. 

Closing Thoughts

There is a reason I have joined forces with an incredibly flexible, high functioning and easy to use freelance management system (FMS) like Bubty: because it enables me, Bubty to extend, and scale, to our customers the best possible automated, near-real-time IC screening and compliance risk management services available on the market.

While I will keep “selling” to a minimum in this newsletter, I will be drawing on my experiences with Bubty customers and referencing our embedded compliance solutions as a means to convey to you what is not only possible in the realm of IC compliance, but what we are actually doing.

And if my experiences are from a competitor of Bubty (because I have worked with a couple of them), then rest assured I will drop their names and pay them credit. 

And finally, if it is not obvious to you by now, I really enjoy talking about IC compliance. But more than hearing my own voice, I truly value learning from your questions and experiences, and from the voices of other professionals in our industry.

Every question is a learning opportunity and I promise I will provide the most up-to-date and relevant answers to your questions as I possibly can.

And no topic (about freelance or contingent labor management tech or services, that is) is out of bounds. Please feel free to reach out to me with questions or to suggest topics that are of interest to you and your company. 

Until next Wednesday, stay compliant and be happy.