Our nonprofit provides services to individuals with developmental disabilities. We have 200 employees and about 20 independent contractors. How do we assure that the ICs follow licensure requirements, procedures, etc.? Our HR department strenuously objects when we mention "training" for ICs - but how can we assure the correct responses to issues when we cannot train these people who are providing therapies to our clients?
Your HR department is correct that training is one of the factors the IRS considers in determining whether a worker is an employee or an independent contractor. Training is one of the factors that tends to be considered as evidence of employee status. But it is only one of at least 20 factors, is not the most important, and provides latitude on the kind of training that may be consistent with independence. (See Ready Reference Page: “Classify: Employee or Independent Contractor”) Although the Department of Labor has simplified the criteria since this Ready Reference Page was written, whether or not the organization controls the work, rather than whether the workers know what they are supposed to do, is much more relevant to the determination.
It is not clear exactly what licensure or procedure issues you are concerned about. Licensure requirements would seem to apply to everyone, whether an employee or an independent contractor, so you can certainly confirm that they are complying with licensure requirements. If you are required to follow certain procedures, perhaps because of some specific governmental requirements or billing requirements for reimbursement, it would seem to be legitimate to advise your contractors of those requirements so that the work they do fulfills your obligations. You may be able to provide other training about effective therapies for your population consistent with their status as independent professionals. Two of the keys to the determination are whether they provide similar services to others, and whether you control “how” they provide the services.
If training will make your ICs more effective with your clients, however, it seems to be almost a no-brainer to conclude you ought to provide it. That seems to be ultimately more important than how they are classified for tax purposes.