Spring into better relationships with temporary employees and staffing agencies

Spring’s approach provides an excellent opportunity to “clean up” your company’s practices and policies regarding temporary employees. As temporary employees become more prevalent in the workforce, there has been a steady increase in litigation related to short-term workers. Below are some important considerations for any company that utilizes a temporary workforce:

Remember: Temporary employees may legally be your employees.

Very often, companies that bring in temporary staff, usually through a staffing agency, forget that these workers are technically their employees, from a legal perspective. Although, companies may not directly pay temporary employees (but rather, pay a staffing agency for providing workers), they generally direct day-to-day job duties, have discretion regarding raises and promotions, and have sole authority to end the assignments of temporary workers. Under these circumstances, most courts and administrative agencies (such as the Equal Employment Opportunity Commission and the National Labor Relations Board) will consider both the hiring company and the staffing agency as “joint employers.” This means that your company, and possibly your direct-hire employees and mangers, may be subject to liability for employment-related claims brought by temporary workers.

Protect yourself and your employees with an indemnification clause.

Your company should always have written agreements with staffing agencies that provide you with temporary workers. In turn, these agreements should have indemnification clauses – meaning the staffing agency agrees to pay your company’s legal fees, liability costs, and other expenses in the event a temporary employee brings a claim against your company. Indemnification clauses may vary drastically in scope of the costs they cover and the circumstances to which they apply. If you do not currently have indemnification agreements in place, or you would like to review existing agreements, you should contact an attorney who can assess your company’s particular needs and develop appropriate contractual language. 

Make sure temporary staff know and understand who employs them.

Temporary staff needs to know and understand who employs them. This sounds obvious, but we often learn during disputes that temporary employees have no idea for whom they actually work. By the time a charge of discrimination or lawsuit is filed, it is too late. For example, your company may request temporary workers from a staffing agency to perform a certain assignment. These workers may not realize the business relationship between your company and the agency that has resulted in their employment. Further, the staffing agency may not have informed the workers about the circumstances of their assignment. In turn, the workers may presume they now work directly for your company. This happens all the time.

Confusion among temporary workers can be problematic. In particular, temporary employees are often subject to different terms of employment compared to direct hire staff, such as compensation, benefits, work hours, job duties, seniority, eligibility for promotions and advancement, and standards for evaluating work performance. These differences may be tied to their temporary status, but if workers do not understand these circumstances, they may perceive different treatment as being discriminatory or retaliatory. To avoid these issues, make sure staffing agencies keep their workers informed about your company and the terms of their assignments. Your company should also take steps to make sure temporary employees understand the nature of their positions and their interrelationships with your direct-hire workforce.

Implement well-defined procedures for communication and complaints.

Many disputes related to temporary workers stem from miscommunication. For example, a temporary employee may believe he is being harassed or treated unfairly by his supervisor, who is employed directly by your company. The temporary worker wants to make a complaint, but he does not know how to contact your company’s HR department or higher-level management. Instead, the worker complains to the staffing agency, but the staffing agency never relays the complaint to you. Or, even worse, the worker never makes a complaint. These circumstances not only open the door to liability for your company, but they hinder your ability to investigate and address potentially unlawful activities.

To prevent miscommunication issues, temporary employees should be made aware of your company’s relevant employee polices, including procedures for reporting concerns and making complaints. Contact information for your HR department and, if available, your employee hotline, should also be made available to them. Further, it is important to work with staffing agencies to make sure they have effective procedures for handling complaints made about your company by temporary employees.

Train your employees and managers regarding temporary staff.

A reasonable change in perception among your direct-hire staff may go a long way towards preventing disputes with temporary employees. Employees, even managers, often carry a belief that temporary employees are just that – temporary, and therefore, expendable. However, your direct-hire staff should be aware that temporary workers have most of the same rights as traditional employees. Training on these matters may be a simple way to avoid exposure.

The legal team at McDonald Hopkins has extensive experience drafting staffing agency agreements, conducting employee training, and handling disputes related to temporary workers. If you have any questions regarding temporary employees, staffing agencies, or any other legal matters, please do not hesitate to contact a McDonald Hopkins attorney.