Knowledge is power: how to mitigate the risks of paying influencers

[Dimaeiya333]

It is a difficult task for companies to ensure that they are paying influencers in a compliant manner and that influencers are complying with the different laws around the world.

The greatest weapon any business has is knowledge . Staying up to date with compliance rules related to influencer marketing is the biggest safeguard against regulatory issues.

This section covers the different payment and transparency regulations , explains some of the variations around the world and offers advice on what businesses can do to protect themselves and their customers.

1. Keep up with paperwork and tax forms
Paperwork is a hassle, especially when working with multiple influencers at the same time. But accurate paperwork is the proof needed when regulators check that payments are being made in accordance with the law.

Therefore, when paying influencers, companies must first know the employment status of their influencer : most likely a self-employed entrepreneur who files taxes.

Companies must then issue the relevant documentation and tax forms , depending on local laws.

For example, US companies must collect an IRS Form W-9 from US-based creators. If you're working with a non-US resident—remember, influencers are often based all over the world—then you'll need to fill out an IRS Form W-8BEN to comply with tax regulations.

There are similar regulations in Europe. For example, in the Netherlands, marketers must establish what is called a “ model agreement ” between their company and the freelance influencer to establish that there is no formal employment relationship between the two parties. Otherwise, the marketer will have to pay taxes on the freelancer’s payroll.

It’s also worth drafting terms and conditions that set out the company’s relationship and agreement with each influencer it works with. This could include remuneration, client expectations, copyright agreement on assets created, and expectations to ensure transparency of the company/creator relationship in public messaging.

2. Securing PII data
To establish a relationship with an influencer and ensure payment is made successfully and legally, companies need large amounts of personally identifiable information (PII).

For example, in the United States, this includes information related to:

Name
Email address
Signed W-9 (US)
Signed W-8BEN (outside the US)
Banking information, including account holder name, bank name, routing number, and account number.
Payment methods such as PayPal, direct deposit or wire transfer
Like any organization that holds large amounts of personally identifiable data, companies that work with influencers are subject to local and regional privacy regulations. Around the world, these include:

CAN-SPAM in the US
Canada's Anti-Spam Legislation
The EU General Data Protection Regulation (GDPR)
The Global Forum on Cross-Border Privacy Standards (CBPR)
These overlapping regulations apply to influencer marketers for good reason. By holding personal information, marketers can be targeted by hackers hunting for personal information for identity theft and fraudulent chief of vp and training email database attacks.

Each regional body has its own advice for companies to avoid a security breach. For example, the GDPR recommends encrypting all devices under surveillance by organisations, because “ if your data is encrypted and a breach occurs, the data will be unreadable and useless .”

In the United States, companies are asked to follow a number of key principles following the advice of the FTC:

Maintain an inventory of company computers, mobile devices, flash drives, or any other digital or printed device that stores personal information.
Streamline the information stored on these devices and ensure that the company only stores the data necessary to do its job.
It encrypts information through “physical security, electronic security, employee training, and the security practices of contractors and service providers.”
Ensure that sensitive information is disposed of appropriately
Prepare guidelines and a contingency plan in case of security incidents