The issue of allegiance becomes more problematic if it leads to a co-employment situation. Co-employment occurs when a company's relationship with the temporary employee takes on the characteristics typically associated with the traditional employee/employer relationship: salary and benefit review, counseling, discipline and termination. When co-employment exists, each company is liable for the employment decisions made by the other. If a contingent employee files a legal complaint and wins, both the agency and the client company could be responsible for any damages awarded.
The preceding explanation of the co-employment issue is included in New York City-based Olsten Corporation's handbook for client companies. It also provides a list of do's and don'ts your company should follow to avoid potential liability:
Because issues of co-employment are directly related to the client company's own actions with regard to temporary employees, the above guidelines can provide companies with a solid foundation for dealing with temporary staffing issues.
SOURCE: Olsten Corporation
Personnel Journal, August 1996, Vol. 75, No. 8, p 46.