Did you know that you have almost all of the same legal exposures when using temporary employees obtained through a staffing agency, as you do for your own employees?
If you didn’t know that, and, instead, you think that such employees are the staffing agency’s problem, and that you have the same degree of obligation to them as you would to purchasing a time-share after “winning” a free vacation, well, you’ve got another think coming.
In a previous article (in which I compared temp employees to toasters), I discussed some of the liability exposures employers can face when using staffing agency employees. In this post, I’ll walk through some of the HR / employment law considerations that accompany the use of staffing agency employees.
There are lots of reasons why employers wind up using temporary employees from staffing agencies. Some do so to fill gaps when current employees take leaves (such as after having a baby), while others do so to meet sudden spikes in workloads.
Still other employers use staffing agencies as sort of a screening service for regular, full-time employees (e.g., a temp-to-hire approach). Under such a model, all new hires for certain positions (commonly production positions) come through a staffing agency for the first 90 days of employment, at the end of which the employer will decide whether to formally hire the SAE, or, if it’s not working out, to send the SAE back to the agency to be replaced by a different SAE.
Regardless of why you may use them, at some point or another, your organization is almost certain to utilize the services of an SAE, so it is important to understand some of the significant employment law considerations that go into using them.
Let’s start by expanding on an issue I discussed in my previous article, and by asking a foundational question: given that SAEs are actually employed directly by the staffing agency, why would you have any HR or employment law-related responsibilities to them?
The answer comes down to the fact that, for most legal purposes, you and the staffing agency will be considered “joint” employers of the SAE. This is true even though the staffing agency makes all the decisions with respect to whom they hire, whom they send over for an assignment, etc.
So, while normally the staffing agency is responsible for such things as making sure SAEs are paid minimum wage and overtime, making Federal Insurance Contributions Act (FICA) contributions on their behalf, completing their I-9s, covering them under the agency’s workers' compensation policy, and paying for their unemployment, should the agency fail to adequately do any/all of those things, you will likely be on the hook for them.
Of course, any reputable staffing agency you might work with will properly and responsibly take care of all of the things listed in the previous paragraph. That said, if you regularly use a lot of staffing agency employees, you may want to occasionally audit their practices or ask for confirmation that they’re doing the things they need to be doing to protect you from the risk exposures of noncompliance.
Now let’s turn our attention to four different risk / responsibility areas employers have when using SAEs.
Employers have a legal obligation to protect all of their employees from harassment and discrimination in the workplace, including SAEs, who need to be both protected from harassment and prevented from harassing others.
In addition to protecting SAEs from harassment, the courts are beginning to require employers to provide SAEs with the same harassment training that is provided to directly hired employees. The court’s rationale is twofold:
SAEs have the same need as any other employee to understand that they can’t harass others, and that they have the right to work in an environment free from harassment.
SAEs need to understand what to do if they find themselves subjected to harassing behavior, and where they can go to report it.
Harassment training is one of the most effective ways for these rights and obligations to be communicated. Indeed, the Supreme Court has said that “regularly” conducted harassment training is a necessary component for building an “affirmative defense” to many hostile environment harassment claims (an “affirmative defense” essentially enables you to kick a case out of court much earlier than you otherwise might be able to do). This training should include SAEs.
Amongst other things, OSHA requires employers to provide employees with a safe working environment, and to record most work-related injuries or illnesses in the OSHA 300 log. “Employees” for this purpose include SAEs, even though they are hired and paid by the staffing agency, and even though any injuries they suffer would be covered by the staffing agency’s work comp carrier.
In other words, you need to make sure that SAEs are provided with proper safety equipment, and trained on the proper safety procedures for the work they will be performing. And, if they suffer a work-related injury or illness, then you need to report them on your OSHA log.
Many employers believe that, should an SAE need accommodations in connection with a disability, the staffing agency has the burden of finding another position within the SAE’s abilities. Thus, the employer has no obligation to change anything about its workplace and can simply ask that a new SAE be sent out to replace the one needing accommodations.
That belief, of course, would be wrong. Here’s how the Equal Employment Opportunity Commission (EEOC) has stated the obligations of both the staffing agency and the employer with respect to providing reasonable accommodations under the ADA:
Because each qualifies as an employer of the staffing firm worker, each is obligated to provide a reasonable accommodation needed on the job, absent undue hardship, if it has notice of the need for the accommodation.
What this means in practice is that, for the most part, you have the same obligations to provide reasonable accommodations to SAEs as you would to any of your regular employees.
However, the issue of what’s “reasonable” can vary between SAEs and regular employees, depending on the circumstances. For instance, if you’re using an SAE to cover during an employee’s 12-week maternity leave, and at the nine-week mark the SAE asks for six weeks of leave to deal with some disabling condition, you wouldn’t have any obligation to provide the leave, since there would not be an open position to return to. However, for a regular employee, six weeks of leave is almost inherently reasonable under the ADA.
Similarly, providing a $7,000 piece of equipment by way of accommodation is almost certainly unreasonable when requested by an SAE who will only be able to use it for a few weeks, but may very well be reasonable for regular employee who will be able to use it for years.
SAEs can have two different FMLA impacts on non-staffing agency employers. First, if you are a smaller organization and are hovering just below the 50-employee threshold, SAEs will have to be included in your headcount to determine if you’ve crossed that threshold.
Second, although the obligation to provide FMLA leave to SAEs usually falls on the staffing agency, you have the obligation to return that particular SAE to the position he/she was working at the time his/her leave started (assuming the need to fill the position with a temp employee still exists). This duty exists even if:
Your organization isn’t covered by the FMLA
The SAE has worked for you for fewer than 12 months (which is the usual threshold for employee eligibility for FMLA leave)
The SAE wasn’t very good in the position and/or the replacement was a lot better (unless you can objectively prove that, prior to the leave, you had already decided to terminate the relationship with the SAE in question)
This can lead to interesting results for those employers who are using SAEs in a temp-to-hire fashion, and who wouldn’t normally allow anyone in the 90-day evaluation period to take leave. However, where the SAE has worked for the staffing agency long enough, the SAE has the right to take leave, and probably has the right to come back into the evaluation period at the same point he/she left it (e.g., an SAE who has completed 60 of the 90 days should probably be reinstated at day 61 of the evaluation period, and thus only have 30 days of evaluation left).
Don’t make the mistake of assuming that you have no substantive responsibilities when it comes to SAEs. Instead, treat them like the joint employees they probably are, at least when it comes to things that have employment law overtones. And, if you have additional questions, feel free to contact us.
James provides guidance to employers on a variety of topics with a focus on employment, risk management and liability issues. In addition to working directly with employers, he regularly conducts in-depth training through webinars, at client sites, and through the University of Minnesota’s Continuin
James provides guidance to employers on a variety of topics with a focus on employment, risk management and liability issues. In addition to working directly with employers, he regularly conducts in-depth training through webinars, at client sites, and through the University of Minnesota’s Continuing Ed program. He previously was a plaintiff’s attorney and brings that perspective into his advice to employers. James received his law degree from the University of Minnesota and his BA from Washington University in St. Louis.
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