Non-permanent workers offer a strategic benefit in terms of agility and scalability in today’s rapidly changing operating environment, enabling access to specialised skills, but the legislation governing them can create compliance challenges that expose businesses to financial, legal, and reputational risk if not managed properly.
Misclassification, payroll errors, and unclear accountability are common and often underestimated. To help you stay compliant and protect your business, here are six practical strategies from our recent roundtable:
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Clarify ownership and accountability
Accountability often becomes blurred when multiple parties are involved, and non-permanent workers rarely have a single internal owner. Define who “owns” compliance, typically a combination of Procurement and HR/TA. When both functions understand their responsibilities, compliance assurance and operational value follow.
Ensure contracts clearly state obligations for payment, tax, and worker engagement, and that these guardrails are applied in practice. Without clarity, gaps emerge and those gaps can escalate to the CEO’s desk.
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Understand your contracting structure
Liability follows the contract – using an Employer of Record (EOR) doesn’t mean risk disappears. Audit your contracts to confirm liability positions. If you contract directly with an EOR, you may hold ultimate responsibility.
Make sure your contracts are up to date and aligned with the latest legislation and roles & responsibilities are mapped out accordingly. Consider new contractual obligations to minimise risk exposure.
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Enforce payroll controls
Incorrect payroll engagement is a common compliance blind spot. Consider what visibility you have of all non-permanent workers and the evidence that they are being paid appropriately via the agency, umbrella or EOR. Audits can prevent systemic issues and demonstrate proactive compliance.
- Get worker classification right
A well-defined policy provides a structured framework that guides all external hiring decisions, reducing risk and enhancing operational efficiency. Designing specific policies that align with strategic direction, organisational goals and compliance requirements, critically enabled by technology automation.
Additionally, integrating a Technology-enabled, automated triage or ‘decision tree’ into the front-end process prior to approval will drive users to the most advantageous sourcing route for non-permanent resources, reducing risk and cost. Creating a formal policy for engaging external talent is essential to ensure a robust, consistent, and compliant hiring process
Misclassification can lead to penalties and reputational damage, especially in the UK under IR35/Off Payroll worker legislation. For UK contractors: conduct robust IR35 status determinations, avoid blanket assessments, maintain audit trials and review working practices regularly to ensure compliance
For more information on IR35 and how AMS can help, please get in touch.
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Manage international tax risks
Each jurisdiction has unique tax laws, thresholds, and compliance requirements. For example, some countries apply rules like the 183-day residency rule, which can trigger tax obligations for employees working abroad from day one. Maintain a country-by-country tax guide and leverage global tax advisory resources to stay informed and mitigate risk exposure.
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Embed risk awareness into change management
Internal stakeholders often don’t understand the risk or the impact of the risk. Adoption requires education and collaboration. Integrate compliance into change management programs. Use training and communication to make risk tangible and adoption sustainable.
Compliance isn’t just a legal requirement; it’s a business enabler.
By clarifying accountability, enforcing controls, and embedding risk awareness into your culture, you can turn compliance from a blind spot into a competitive advantage.
The next roundtable in our series will be held in February 2026. You can also read our last article in this series, 6 smart strategies for leveraging technology to optimise your non-permanent workforce here.
