Published Date: 08/18/2014
By Pat Rountree
We have recently discussed joint employment relating to the staffing agency/client relationship (Advice and Resolution Corner - "Joint Employment Responsibilities" Regarding Temporary Employees) and the responsibilities of each under some of the primary employment laws.
Although each law defines factors that determine the primary employer, there are steps that both primary and secondary employers can take to limit liability. There are also steps secondary (client) employers should follow to avoid primary employer status.
- Ensure that your joint employer is a reputable company.
- Have contractual agreements that outline the responsibilities of each employer to comply with applicable employment laws, and indemnification clauses (including coverage of attorney fees) to protect you if the joint employer violates the law.
- The staffing agency should be responsible for hiring and firing the contingent employee.
- Client employers should review benefit plan documents and benefit policies to ensure that the language excludes contingent workers from eligibility for coverage.
- The staffing agency as the primary employer should hire and fire, handle payroll for the employee, and be responsible for mandatory employment benefits (workers’ compensation, unemployment, social security, etc.), as well as any company-provided benefits.
- The client employer should provide the staffing agency with policies that their employees will need to be aware of while working for the client. The staffing agency will have call in procedures, attendance policies and their own handbook/policies that apply to their direct employees.
- The staffing agency and client will both need to be involved whether there are claims of harassment, discrimination or other issues that require investigation involving a contingent worker and a client employee; however, the staffing agency is primary in dealing with their employee.
- Staffing agency employees should not be rewarded directly by the client employer. The client employer may make the staffing agency aware when a temporary employee’s performance exceeds expectations so that the agency can recognize their accomplishments; or the client may approve an increase in pay that the staffing agency would discuss with their employee based on their excellent performance.
- Time limits are a gray area when it comes to staffing agency employees. However, it is recommended that these employees be hired to fill in or on a project basis that is not on-going. Past recommendations have been to review the employment status at least at the six-month period. While some projects may require that contingent workers continue in the position beyond that period, the longer the period continues, the more likely the distinction between direct and contingent employees will become hazy for supervisors.
There are other joint employment relationships such as independent contractor/employer, leased employees, integrated employers (common ownership of two or more companies) perhaps including franchisor/franchisee (See George Ports’ article on McDonald’s and the NLRB - NLRB Rules on Joint Employment in McDonald's Case). Each situation is unique, and requires an individual analysis of best practices to maintain the desired relationship.