Co-employment is a legal doctrine which applies when two businesses exert some control over an employee’s work or working conditions. The relationship between a staffing agency and a business is a common example of this. Co-employment liability is incorporated in many of the federal employment law statutes. With the exception of OSHA (which almost exclusively places workplace safety and record-keeping procedures in the hands of the business where the work is performed) most of the employment laws are set up to provide the bulk of the responsibility to the employment agency.
Generally speaking, the staffing agency will be viewed as the “primary employer” and will bear the majority of the responsibility for the employee. However, if a business does not clearly differentiate the workplace relationship between their permanent employees and their temporary employees they can potentially open themselves up to claims from their contingent workforce.
Many of the problems with co-employment arise when the client company assumes more responsibilities in overseeing the temporary workforce. By following some basic guidelines you will be able to substantially minimize your risk of litigation as a co-employer.
Here are some practical guidelines to follow:
· Contract with a staffing agency who has solid knowledge of co-employment liability and also of Federal and State employment laws. (Click here to read about more information on How To Select a Great Staffing Agency).
· Rather than supplying temporary workers with your handbooks and safety procedures, ask that the staffing agency produce similar documents on their letterhead to distribute to the temporary workers.
· If you issue ID tags or uniforms to your employees, consider using a different style or color for the contingent workers.
· When possible ask the staffing agency to perform training and testing at the staffing office. Training tools such as math/reading tests, typing skills and safety videos can easily be given at the agency location.
· Disciplinary procedures, when required, should be implemented and documented by the staffing agency.
· Client company should provide the agency with guidelines on pay for each position, but the responsibility of setting the pay should lie with the staffing agency.
· Include a section in your benefits package that explicitly excludes temporary employees from qualifying for benefits programs.
· If using a high volume of contingent workers, ask that a representative from the agency be available to come to the worksite to oversee administrative duties and disciplinary supervision at set times throughout the week.
· If hiring a temporary worker on to your full-time staff, make sure the employee follows the same procedure as any typical applicant would follow with your company if being hired directly.
· Ask that the temporary employees sign a document stating that they are employees of the staffing agency and acknowledging the differentiating responsibilities that the staffing agency and the client have with regards to the employment relationship.
· Draft a contract that clearly outlines and defines the roles and responsibilities of both the staffing agency and the client business.
Co-employment is inherent in any staffing firm/client relationship. Both entities will always retain some shared control over the employees. If managed effectively companies can maintain the benefits and convenience of a flexible workforce, while reducing their exposure to co-employment litigation.