potential litigation. “Don’t lull yourself into a false sense
of security that because an individual comes from a staffing
agency, you’re immune from liability, from being named in
a lawsuit,” cautions Joel Greenwald, managing partner of
New York City-based firm Greenwald Doherty LLP, who
specializes in employment law representing management.
An Alabama auto parts manufacturer, for instance,
was on the hook—along with two staffing agencies—for
$2.5 million in penalties for federal safety and health violations last year after a temporary worker was crushed
to death inside a machine, according to the U.S. Occupational Safety and Health Administration (OSHA). Had the
staffing agencies and manufacturer provided the temp with
proper safety training and equipment, they would have
averted the fatality, OSHA reports.
Natalie Ivey, SHRM-SCP, president of Results Performance Consulting Inc. in Boca Raton, Fla., recalls working in HR years ago for the rental car company that used a
staffing agency to hire the driver with a suspended license
who caused an accident. Her contract with the agency specifically requested individuals with a five-year clean driving record who could pass drug and criminal background
tests. She even paid the staffing agency $2 extra an hour
to get better drivers.
“They were bobbing their heads up and down [to indi-cate] ‘yes, yes,’ but they did not honor the contract,” Ivey
The motorist who was injured sued Ivey’s employer,
which in turn had to sue the staffing agency for breach of
contract, she says.
Many companies assume that signing a contract stating
that the agency is the employer of the temporary worker
absolves them of responsibility as an employer, but that’s
often not the case.
Companies still can be considered “dual” or “joint”
employers when they direct the day-to-day activities of temporary workers or even tell them when to take a break. A
temp who alleges a hostile work environment could sue both
the company and the staffing agency, Greenwald says. And,
if the agency isn’t paying a fair wage, the company could be
the target of a lawsuit.
That’s why vetting an agency is so important. “You have
to always be conscious of where you get your labor from,”
However, the American Staffing Association’s Dwyer
says the joint-employer standard established by the National
Labor Relations Board actually benefits companies because
agencies provide the workers’ comp coverage when there
Ask legal counsel to review the indemnification clause of
each contract rather than relying on standard language, Ivey
advises. For example, language that clarifies who’s responsible for mistakes made by a temporary forklift operator
might need to be different from language for a petroleum
engineer, she says.
In addition, having temps work side by side with regular
full-time employees for lengthy periods may be problematic,
That’s the issue Microsoft ran into in 2000 when it paid
$97 million to settle a federal lawsuit by thousands of people
who said they were classified as temps for years as a way for
Microsoft to avoid paying them benefits.
“ A general rule of thumb is you don’t want to be using a
temp for more than 90 days,” Machir advises.
Year-to-year staffing job
growth has averaged 4.1%
a month in the first 10
months of 2017, compared
to 1.4% for 2016.
In the past decade, the
percentage of temp
workers has grown from
1.9% to 2.1% of the
total U.S. workforce.
In 2016, 144 staffing
agencies each generated
$100 million or more in
U.S. revenue, up from 134
companies the year before.
1/3 of temporary workers
are offered employment
at the company where
they are temping.
Sources: U. S. Bureau of Labor Statistics, Staffing Industry Analysts and the American Staffing Association.