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5 Easy Steps to Avoid Co-Employment Issues

Many companies hold off using temporary workers because they fear co-employment lawsuits.  However, the truth is that hiring a temporary worker through the “right” staffing firm is no more risky than directly hiring an employee. Lawsuits are a reality, regardless of what type of employment arrangement being used. Employers can never completely avoid lawsuits, but they can minimize them ― with the right partnership.

But first, what is co-employment?

Co-employment issues can arise when a worker has two or more supervisors who exercise real or potential control over their duties and activities. In other words, it defines a legal relationship between two companies (usually a staffing firm and one of its client companies) in which both have actual or potential legal rights and duties as employers.

Co-employment is not a dirty word, but liabilities could arise if the client performs a role that the staffing firm ― as the “primary employer” ― should perform.

So what are the client’s responsibilities?  

Generally, a client company has three primary obligations when it comes to temporary workers:

  • Supervise and direct their day to day work
  • Control work site conditions, ensuring the site is safe
  • Determine the length of the assignment

What is the staffing firm’s responsibilities?

The staffing firm, as the primary employer, is responsible for:

  • Work authorization check (I-9 and e-Verify)
  • Pre-screening, reference check, behavioral assessment, drug screening, background check, etc.
  • Hiring and firing
  • Establishing pay rates
  • Paying the worker and all related payroll taxes and benefits
  • Providing workers’ compensation and unemployment coverage
  • Assigning and reassigning workers to jobs
  • Complying with wage and hour laws and other employment regulations

But that is just the bare minimum.  You should partner with a staffing firm that also does the following:

  • Obtains job descriptions and selects qualified candidates
  • Maintains regular contact with the temporary workers and provides performance feedback to them
  • Handles all personnel issue and maintains all “personnel files”
  • Manages all workers’ problems or concerns directly
  • Ensures that all workers are properly trained.

What Does Not Decrease Your Co-Employment Risk

  • Reducing the temporary employee’s hours. The truth is that assignment length is only one of several factors that are used to determine whether or not a co-employment arrangement exists. However, if you do intentionally reduce hours, you run the risk of violating the Employee Retirement Income Security Act of 1974 (ERISA) if this practice is construed as an effort to prevent workers from reaching needed hours for benefits plan participation.
  • Work reallocation. This is also known as “churning” workers. It is extremely inefficient, because it can take anywhere between 1 to 2 years for a worker to truly understand their job (with all its nuances) and become truly productive. By moving workers around, no one remains in a job long enough to truly understand it.

5 Easy Steps to Decrease Your Co-Employment Risk

  • Work with a reputable staffing firm.
  • Have the staffing firm provide on-site supervision, when hiring a large number of workers for an extended period.
  • Minimize contact with the temporary workers and have them (whenever possible) take up any HR-related issues directly with their primary employer ― the staffing firm.
  • Avoid discriminatory conduct
  • Maintain a safe site for all employees.

Snelling is one of the most reputable firms in this industry, and we take great care to maintain this reputation. We can help you take the steps necessary to reduce you company’s exposure to co-employment liabilities. To learn more, contact us today or locate your closest office…and let’s talk.

*Disclaimer:  This article is for informational purposes only and is not intended to replace consultation with and advice from competent legal counsel.