Best practices when hiring temporary employees from labor pools or staffing companies
The Bottom Line
When using temporary labor from staffing companies or labor pools, clearly define the roles and responsibilities of the primary employer and the host employer. Not doing so could result in a joint-employer status and thus joint liabilities.
Like many trades, glass and glazing companies find themselves in a tight market for quality labor. This prospect shows no signs of loosening even as project volumes fluctuate.
To address labor issues, many companies turn to labor pools or staffing companies. These arrangements can provide flexible resources to maximize job opportunities while keeping overhead low. On the other hand, downsides appear when these arrangements are treated as something less than temporary or less than independent.
Most owners understand that temporary staffing or labor pooling organizations offer skilled or unskilled workers to another company for a set duration or project. In principle, these workers are to remain the employees of the staffing agency. Legally, the staffing agency is the primary employer and remains responsible for employee wages and compliance with labor guidelines even as its employees provide work for another company—the host employer.
A separate legal concept, joint-employer status, can throw a wrench into that arrangement. The United States Department of Labor has guidelines that define when two companies can become jointly liable for the wages and labor commitments owed to employees. The standards are factually intensive and usually applied on a case-by-case basis. Generally, joint-employer status occurs when a host employer directly controls the rate of pay, work performed, and/or the hiring or firing of the staffing company’s workers.
Beyond responsibility for wages, joint-employer concepts also stretch into obligations for worker safety. OSHA requirements and general site safety requirements are regularly applied to both the primary employer and host employer. Primary employers are usually charged with the responsibility to inquire about the conditions and safety equipment available to their workers. Host employers are usually charged with ensuring that the site conditions are not unreasonably dangerous and that appropriate working conditions are observed.
How can a host employer ensure quality labor, safety and performance, while at the same time not overstepping into direct control of the primary employer’s workers? An answer starts with clearly defined scopes of responsibility and consistent enforcement of scopes of work.
1. Define the roles and responsibilities
When entering into a staffing or job-specific agreement to provide labor, it is essential that the roles of the companies—the primary and host employers—are defined. One entity should specifically retain responsibility for wages and labor law compliance. The other should specifically disclaim those same obligations. Specific statements of the roles held by the primary and hosting employers is a first, but not determinative, step to avoiding joint-employer issues.
2. Define the work
Next, the work itself should be defined so there are few questions regarding what the temporary employees are being brought in to do. When the work is undefined or too vague, the hiring employer may be presumed to have full control over the staffing company’s employees. This can increase the likelihood that joint employment will be found. Obviously, exact particularity in the definition of work is not always possible, but an effort should be made to spell out what is, and is not, expected from the temporary employees.
3. Answer worksite questions
Define the site, access issues and safety responsibilities carefully. It is important to define the area where the hiring employer’s responsibility for the temporary employees begins and ends. Equally, responsibility for PPE and site protections should not be avoided. But to the extent that a hiring employer is relying on the technique and tooling offered by a staffing company, the responsibility for provision, use and safety accompanying those items should be specifically addressed.
4. Set the right to refuse
An often-overlooked area is the importance of defining when the staffing company’s employees can refuse to comply with the hiring company. The agreement for temporary employees should specify that the separate nature of the relationship means the hiring employer cannot force the temporary employees to do anything unsafe or outside the scope of the agreement. Ensuring the right of the temporary worker to refuse the hiring employer, without penalty, can be a shield to claims of joint-employer control.
5. Set payment and compliance responsibilities
Defining who is responsible for wages and labor compliance will be an obvious condition of the agreement. Do not forget to address required reportings that arise in employer-employee relationships. A specific example is OSHA 300 incident reports. While information about an unfortunate incident may be held by both companies, the contract should detail that the staffing company remains responsible for reporting relating to its employees. Responsibility for other similar local and federal required reporting obligations should be specified as well.
6. Enforce the agreement
Consistent enforcement of a temporary-employee agreement’s definitions is crucial. Operations outside the scope of the agreement venture into potential joint liability for employees. Because of that, it is equally important that the agreement specify the consequences for failure. Detail responsibilities for indemnification, fines, penalties and attorney’s fees in the event of a challenged practice or employment claim. The benefits of temporary workers should not be undone by lax enforcement or defense of baseless claims.