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ISSUE 4
While you may want to implement specific practices to boost productivity or standardize output, exerting control over contractors risks misclassification. Additionally, contractors may be unavailable for urgent tasks if they are committed to other clients. Full-time employees tend to be more committed and readily available to support in critical situations. 2. Intellectual Property In many African countries, like Nigeria for example, the copyright to any work created rests with the creator unless otherwise specified. But the copyright to work created by an employee within the course of their employment belongs to the employer. So, in fact, having employees poses significantly fewer risks with regards to a company’s Intellectual Property. 3. Unexpected Costs Should an independent contractor be wrongly classified as such, and should the local authorities find you guilty of employee misclassification, there would be much at stake for you. This includes paying hefty fines for violating worker rights, back payments for all the shortfalls experienced by the misclassified contractor/employee, as well as other financial and reputational penalties. 4. Insurance and Liability Independent contractors do not receive regular employee benefits – and that includes health and life insurance. But this doesn’t mean that contractors do not face the same risky situations as employees do – it only means that they are less safe in these
circumstances. Should an independent contractor get hurt or otherwise suffer from an incident at work, they would not be protected by insurance – and may instead ask for compensation from your company, a situation rife with liabilities. “The distinction between an independent contractor and an employee is critical, as it has significant legal and regulatory implications across Africa.” Key considerations for companies making this transition Companies looking to convert contractors into full-time employees should consider: 1. Assessing Current Workforce Evaluate your current contractors to determine if they meet the criteria for independent contractor status or if their roles suggest they may qualify as employees. Consider the necessity of their skills and the financial implications of converting them to employees. If conversion is not viable, ensure that contractors strictly adhere to the independent contractor definition to prevent misclassification issues. 2. Partnering with an EOR When operating in Africa, it can be difficult to assess who is an independent contractor and who is an employee, since the definition changes from country to country.
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