Employer Obligations to Temporary Workers

Where the host employer exercises control, joint employment exists.

This article accompanies Contingency Plans

Wednesday, December 1, 2010
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Increasing numbers of employers are using temporary workers from staffing agencies, whether to meet short-term needs or to replace laid off employees.

Since a host employer often exercises control over temps regarding daily tasks, working hours or similar conditions of employment, it can become a joint employer under various laws.

Although the staffing agency is the employer for taxes and payroll purposes, a host employer still has some responsibilities under anti-discrimination laws, the Family and Medical Leave Act and the Fair Labor Standards Act.

Discrimination and Harassment

All employers covered by state and/or federal discrimination laws must provide a workplace free from discrimination and harassment. Since potential liability extends to non-employees such as contractors and temps, a host employer can be liable for discrimination claims involving temps, whether the temp is a victim or an offender.

If a temp is harassed by other employees, the host employer can face liability for the actions of its employees. The host employer must respond promptly and effectively to address the situation. Informing temps of the anti-harassment policy and reporting procedures can help ensure that they know how to report any misconduct.

If a temp is the offender, the host company will again need to take prompt corrective action. Since traditional disciplinary approaches may be inappropriate for a non-employee, the matter should be raised with the staffing agency. That agency, as the temp's employer, should respond appropriately. Of course, the host company could also request a different temp.

Host employers can also be held liable for requesting discriminatory referrals.

According to a guidance from the Equal Employment Opportunity Commission: "The anti-discrimination statutes not only prohibit an employer from discriminating against its own employees, but also prohibit an employer from interfering with an individual's employment opportunities with another employer."

For example, a host employer cannot refuse to accept a temp based on religion, race, national origin or membership in another protected class. Also, the staffing agency could be held liable for complying with a discriminatory request, and should refuse to honor any potentially unlawful request.

Family and Medical Leave Act

Temps are considered joint employees under the FMLA, and the host company must count any temps when determining FMLA coverage. For example, if an organization with 45 employees also has 15 temps, the organization has more than 50 "employees" and would be covered by the FMLA -- if this threshold is met for 20 or more workweeks.

Also, time spent working as a temp must be counted toward FMLA eligibility if the temp is hired as a regular employee.

For instance, if an individual works as a temp for at least 12 months and more than 1,250 hours during that time, the temp meets the eligibility criteria and has a right to take FMLA leave immediately after being hired as a regular employee (assuming the individual works at a location which has 50 or more employees within 75 miles).

A host employer could face FMLA liability for interfering with a temp's FMLA rights, even if the FMLA does not apply to the host employer.

When a temp requests leave, the staffing agency must provide the required notices, obtain certifications, track the amount of leave taken and restore the temp to the same position (or an equivalent position) when the leave ends.

This means that, if the former assignment is still available when the temp returns, the staffing agency must restore the temp to that position. The host employer cannot interfere with this obligation. A position is "available" under the FMLA even if a different temp had been hired as a replacement.

In Grace vs. USCAR and Bartech Technical Services, the U.S. Sixth Circuit noted in March 2008 that "a secondary employer in a joint-employment relationship need not satisfy the numerosity requirement (i.e., 50 or more employees)."

So even if a host employer is not covered by the FMLA, it must still allow the staffing agency to fulfill its obligations to the employee. Otherwise, the host employer could be held liable for interference with FMLA rights.

Fair Labor Standards Act

The FLSA also recognizes joint employment where an individual works at multiple jobs for the same organization.

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For example, if an employee works at two restaurants owned by the same employer, all hours worked at both locations must be combined for overtime. Similarly, if a temp gets assigned to more than one facility for the same host employer, all hours worked must be credited toward overtime.

Host employers could also be liable for recordkeeping violations. For example, if the host employer asks a temp to work without recording the hours or denies a lunch break while still deducting 30 minutes for a meal period, the temp would not receive all required wages and overtime.

The temp should report the problem to the staffing agency, but if a lawsuit arises, the host company could still face liability.

Liability under Joint Employment

Although a temp is officially employed by his or her staffing agency, the host company is usually a joint employer and can face liability for many of the same violations that result in lawsuits from regular employees.

Any relationship in which the host employer exercises some control over the temp, such as directing day-to-day tasks, may create a joint-employment relationship (and joint employment automatically exists under the FMLA).

Once the host employer exercises such control, the joint-employment relationship creates potential liability.

Edwin Zalewski has been an editor at J.J. Keller & Associates Inc. since 1999.  As a member of the human resources publishing team, he researches and writes on topics such as discrimination, harassment, FLSA compliance, workplace violence and I-9 compliance. He has fielded thousands of employment-related questions and assisted human resource professionals in addressing the various nuances and challenges facing them today.

See also:

Contingency Plans

The Legal Quagmire

Legal Risks of Temps

Ranking Staffing Companies

Temp Problems to Avoid

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