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Temps Can Cause Long-Lasting Legal Headaches

As more employers use staffing agencies, they should pay attention to the possibility that their organization, and not the staffing agency, could be liable for the conduct of a temporary employee.

August 28, 2014
Related Topics: Contractors, Labor Law, Temporary Staffing, The Latest, Staffing Management
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In 2013, the staffing industry generated $122 billion in sales, with $109.2 billion coming from temporary and contract staffing, according to the American Staffing Association.

Companies often use temporary employees because they offer scheduling flexibility, potential savings in time and money and specialized skills.

As more employers use staffing agencies, they should pay attention to the possibility that their organization, and not the staffing agency, could be liable for the tortious conduct of a temporary employee.

  • A Tale of Two Employers. When a temporary employee, initially employed by a staffing agency, is assigned to work for a second employer, the employee can be found to have two employers — the former a “general employer” and the latter a “special employer.”

    The first step in determining whether your company, as the special employer, is liable for that employee’s negligent conduct is to assess whether you have control over the employee. This inquiry is fact-intensive and can result in a finding that the general employer, special employer, or both, had the right to control an employee’s conduct and, therefore, may be liable for negligence. Similarly, if the employee claims discrimination or harassment, both the general and special employers can be charged in a U.S. Equal Employment Opportunity Commission complaint. If your firm uses a staffing agency, review the contract carefully to make sure that liability related to temporary employees is clearly and fairly allocated.
  • Determining Who Has Control. Legally speaking, the company “in control” may be liable for a temporary employee’s tortious conduct because that company is in the better position to take measures to prevent the tortious conduct or injury. To determine if your company is “in control,” consider the following factors: how the contract specifies which employer has control over the temporary employee; the degree of control your company has over the manner and method of the employee’s work; the degree of supervision customarily associated with the type of work performed; who has the ability to discharge the employee; which employer pays the employee’s wages; whether the services performed by the employee were skilled or unskilled services; duration of employment; which employer provided the tools used by the employee; and whether the type of work performed was within the special employer’s normal course of business. While under some circumstances both the general and special employer have the right to control an employee’s conduct, an employer who gives up or fails to exercise control is likely not the company “in control.”
  • A Special Employer’s Actions Must Be Within the Scope of Employment. A special employer is not automatically liable for a temporary employee’s negligence simply because the conduct occurs during business hours or on business premises. In order for an employer to be liable for its employee’s actions, the action must be directly related to the employee’s work.

    Consider: Whether the conduct is required by or incidental to the employee’s duties and whether the conduct was reasonably foreseeable in light of your company’s business. If you are a special employer, carefully outline the temporary employee’s duties and responsibilities to protect against possible liability for a temporary employee’s actions.
  • Contracting Employers Should Ensure Adequate Training for Temporary Employees. While a staffing agency can provide generalized training (violence in the workplace, sexual harassment), your company, as the second employer, should not rely on the agency to provide the proper specialized training. Make temporary employees aware of your company’s policies against sexual harassment, use of company computer equipment, etc., before they start work. Specialized training, however, is a double-edged sword. An employer providing specialized training may indicate control over, and thus liability for, the employee. Additionally, poorly conducted specialized training will not inure to your benefit. Training should be adequately conducted and routinely reinforced, both in terms of the job requirements and your company’s overall workplace policies.

Richard Hu and Rachel L. Schaller are attorneys in the Chicago office of Taft, Stettinius and Hollister. Comment below or email editors@workforce.com. Follow Workforce on Twitter at @workforcenews.

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