12-Step Prescription for Managing a Contingent Staffing Program

Law firm Littler Mendelson has come up with a prescription to help corporations manage what it predicts will be a dramatic rise in the use of contingent labor. In its report “The Emerging New Workforce: Employment and Labor Law Solutions for Contract Workers, Temporaries and Flex Workers,” Littler lays out 12 steps to help companies cope with rules, regulations and other issues that may arise with the increased use of contingent labor.

> 1.
Conduct an audit.

Identify the current contingent workforce, assess labor-law compliance and evaluate the likelihood of contingent workforce growth.

> 2.
Consider appointing a workforce compliance specialist.
Find or develop expertise in current and proposed laws and regulations covering the contingent workforce, and set reporting responsibility of the specialist among the human resources, legal and procurement functions.

> 3.
Source or pre-source key vendors.

Make sure contracts for contingent labor follow and comply with labor laws. Make sure vendor agreements include necessary employee background checks, safety requirements, anti-discrimination pledges and proper record keeping.

> 4.
Consider a global mobility program.

Determine how talent can be accessed worldwide and how to establish subsidiaries outside the U.S.

> 5.
Review and revise privacy policies.

Determine how much background-checking information can be required from contingent workers who have access to your workplace, and what types of monitoring of those workers can be done.

> 6.
Ensure wage-and-hour compliance by vendors.

Review contracts with vendors and clients for proper wage-and-hour language. Consider using third-party certification agents and auditors to check compliance.

> 7.
Review executive compensation.

Consider extending certain executive compensation programs to consultants and contractors. Monitor federal executive compensation rules and requirements for impacts on high-level contingent workers.

> 8.
Monitor traditional labor laws.
Watch for contract-worker restrictions in collective bargaining agreements. Consider responses from unionized workers to contingent worker arrangements. Monitor federal and local labor legislation that may affect contingent worker use.

> 9.
Protect trade secrets.

If necessary, review and modify agreements on inventions and proprietary information with staffing agencies, contractors and other contingent workers. Review rules on access to proprietary information. Control computer access as needed. Review noncompete agreements in relation to contingent workers.

> 10.
Review federal and state rules on downsizing.

To help avoid problems when contingent workers are let go, structure agreements so that the 60-day notice contained in the Worker Adjustment and Retraining Notification Act does not apply to them. Make sure staffing agencies are aware of those rules as well.

> 11.
Evaluate the impact that the use of contingent workers will have on workers’ compensation coverage, unemployment insurance taxes and other employment taxes.

Determine who will be responsible for paying any applicable taxes. Anticipate potential for civil litigation from injured contingent workers if questions about workers’ compensation arise.

> 12.
Review and revise benefit programs.

Closely monitor national health care reform for any changes that may affect contingent workers. Examine the fiscal impact of increasing contingent workers on health plans, pension plans, 401(k) programs and any other benefit programs that apply to permanent workers.

Garry Mathiason, Littler vice chairman and chairman of the firm’s corporate compliance practice group, says companies up to now have now done little advance planning for the use of contingent workers. He says more companies are now starting to realize the growing importance of contingent workers in their overall labor strategies and have begun planning for broader use of contingent workers as the economy picks up.

Littler, though, is figuring that plenty of companies won’t take the time to prepare for coming changes, which should keep lawyers busy.

“We are getting ready for the eruption of problems, probably from companies that haven’t done any pre-planning,” Mathiason says.

Workforce Management, October 19, 2009, p. 48Subscribe Now!