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Watch Your Step When Using Temp Employees

Volume 2, Issue 10
May 31st, 2014
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If you use temporary staffing firms to supply some of your personnel needs, you need to prepare for federal and some state government agencies scrutinizing your operation.

This nationwide and state-level campaign targeting temp employees has progressed hand-in-hand with the efforts of labor unions targeting what they term “contingent employees” – temp workers and independent contractors – the unions say are exploited, and of course who cannot be organized.

For example, for several years union front called worker centers have waged war on third-party logistics warehouse operators who use temp workers, and successfully enlisted the help of state wage and safety enforcement agencies as part of a back-channel war against the unions’ ultimate bete noire: Walmart (See article on Page 2).

Late last year the OSHA Administrator announced a campaign specifically aimed at logistics and transportation providers.

In addition, the new chief of the U.S. Labor Department’s Wage and Hour Division also has vocal about the fact that he considers the logistics and moving and storage industries among that agency’s prime targets. (ACWI Advance, 5-15-14, Page 5).

“As a number of business executives have learned the hard way, leasing employees – although convenient and cost effective – will rarely shield their company from liability for employment law violations, says Nicholas R. Hankey, an attorney specializing in labor law with the law firm of DLA Piper.

“To the contrary, the courts have consistently ruled that the customer is a joint employer along with the subcontractor or labor supplier and, thus, jointly liable for all aspects of the employment relationship,” he adds.

To protect yourself Hankey says you should start by insisting on a contractual mandate that the leasing agency have Employment Practices Liability Insurance (EPLI) and that your business be included as an “additional named insured” at the leasing company’s expense.

 The contract also must also include an indemnification clause because EPLI won’t cover wage-hour violations. “But, unless the business uses a reputable, well-capitalized leasing firm, this provision may be worthless,” Hankey warns.

 When the leased employees are on your premises, he adds, it is imperative to audit your leasing agency: Check on the most common problems that flow upstream – I-9 compliance; wage-hour compliance and OSHA violations. “The best answer remains ‘trust but verify,’” Hankey points out.

Preparing for an OSHA Visit

Employers have more detailed information available to help them with OSHA’s initiative launched last year, including detailed instruction to its inspectors about what to look for, according to attorneys Mark S. Dreux and Matt Thorne of the law firm of Arent Fox LLP.

OSHA’s recurring theme for protecting temporary workers is joint responsibility between the host employer and staffing agency. However, regardless of responsibilities staffing agencies bear regarding worker safety, OSHA said its bottom line you “must treat temporary workers like any other workers in terms of training and safety and health protections.”

The agency specifically recommends that host employers communicate with the staffing agency at the outset of the engagement to “set out their respective responsibilities for compliance with applicable OSHA standards.”

Evaluate the hazards to temporary workers because the host is in a position to prevent and correct, then act accordingly, OSHA asserts. For example, it points out, host employers are usually in a better position to provide safety training on a hazard/piece of equipment that is unique to its worksite.

Dreux and Thorne off the following advice to host employers:

Audit/evaluate worksite hazards. Review the anticipated scope of the temporary workers’ tasks and determine if they will be exposed to any potential safety hazards that are unique to the worksite. This will help determine which employer (host or staffing agency) will be in a better position to address them.

Maintain good communication. At the outset of any engagement, find out from the staffing agency what are the respective safety responsibilities for temporary workers (e.g., training), then document them in the parties’ contract.

Address the issue of injury/illness records responsibility. Confirm which employer will supervise the temporary workers on a day-to-day basis. This will determine who bears responsibility for maintaining their injury/illness records.

Confirm adequate safety training/tools. Depending on the hazards or equipment used at the work site, confirm that all temporary workers have received the necessary safety tools, personal protective equipment and training in a language and vocabulary they understand.

In OSHA’s view, temporary workers should receive the exact same training as hourly employees. The training should also be documented and readily available should an inspector request it.

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