High Tech Case Study
Industry
High-Tech: Semiconductor Manufacturer
Company Profile
$2 billion in sales; 9,700 employees worldwide; publicly traded
Background
The IRS considers the client a priority case, assigning auditors to work at the company site five days a week. In an attempt to protect itself, the company's executive board set up cross-functional teams comprised of HR, Purchasing and Legal to manage compliance issues. These teams failed to solve the problems because of a lack of expertise, resources and capacity.
Challenge
Prior to engaging ICon, the client was being fined millions of dollars per year due to the misclassification of independent contractors. As a large enterprise business that relies heavily on independent contractor services, the company was deeply involved in an ongoing IRS probe dating back to 1986. The IRS continues to audit the client at the present time.
ICon Outcomes
ICon implemented its web-based contingent workforce management of independent contractors that resulted in no fines for the first time in 1997. Since that time, the IRS has not imposed a single fine for non-compliance and the taxing authorities have not been back to require the client to further defend their workforce classification status in an audit. ICon has stabilized the client's contingent workforce practices by providing customized billing, divisional and consolidated company wide reporting and overall independent contractor compliance - including audit support for all independent contractor engagements across the company.
The ICon suite of services also saves the company significant costs by allowing internal human capital resources to focus on strategic business management plans, while ICon focuses on their contingent labor.
ICon Solution
ICon provided the client with a dedicated website and support services to facilitate its on-demand nationwide solutions, including:
- Independent Contractor Compliance
- Payroll and Benefits
- Audit Support
ICon stabilized the client's contingent workforce practices by providing customized billing, divisional and consolidated company wide reporting and overall independent contractor compliance - including audit support, for all independent contractor engagements across the company.
Results
- ICon eliminated millions of dollars in fines.
- ICon provided stop-gap services for all departments.
- ICon delivered historical data that can be used for benchmarking and forecasting purposes.
- ICon ensured that the client is no longer in jeopardy of having to defend its status in an audit.
- ICon provided the client with the ability to cross-reference its database to eliminate double payments or inappropriate classification.
- ICon boosts utilization of independent contractors through more-timely cycling of workers into the company.
- ICon monitors independent and payroll contractor headcount online, with up-to-date, real-time information.
- ICon is the single point of contact for all independent contractors nationwide, for processing.
- ICon provides trend analysis and workforce composition analysis.
Estimated Retained Profits
Since partnering with ICon, this client has realized company savings in the multi-million dollar range and the audit activity has subsided. With the tremendous success of the program, the client presented ICon with its Quest For Gold Award, which has only been give out twice since its inception in 1990.
ICon's solution is excellent - superior to other services that we've tested. The staff is very knowledgeable and will deliver the answers I need right away.
- High Tech Sr. Procurement Manager